Correlation Between Macauto Industrial and Actron Technology
Can any of the company-specific risk be diversified away by investing in both Macauto Industrial and Actron Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Macauto Industrial and Actron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macauto Industrial Co and Actron Technology, you can compare the effects of market volatilities on Macauto Industrial and Actron Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Macauto Industrial with a short position of Actron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macauto Industrial and Actron Technology.
Diversification Opportunities for Macauto Industrial and Actron Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Macauto and Actron is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Macauto Industrial Co and Actron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actron Technology and Macauto Industrial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Macauto Industrial Co are associated (or correlated) with Actron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actron Technology has no effect on the direction of Macauto Industrial i.e., Macauto Industrial and Actron Technology go up and down completely randomly.
Pair Corralation between Macauto Industrial and Actron Technology
Assuming the 90 days trading horizon Macauto Industrial is expected to generate 1.08 times less return on investment than Actron Technology. But when comparing it to its historical volatility, Macauto Industrial Co is 1.08 times less risky than Actron Technology. It trades about 0.09 of its potential returns per unit of risk. Actron Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15,350 in Actron Technology on October 26, 2024 and sell it today you would earn a total of 450.00 from holding Actron Technology or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macauto Industrial Co vs. Actron Technology
Performance |
| Timeline |
| Macauto Industrial |
| Actron Technology |
Macauto Industrial and Actron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macauto Industrial and Actron Technology
The main advantage of trading using opposite Macauto Industrial and Actron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macauto Industrial position performs unexpectedly, Actron Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Actron Technology will offset losses from the drop in Actron Technology's long position.| Macauto Industrial vs. Compal Broadband Networks | Macauto Industrial vs. Niching Industrial | Macauto Industrial vs. Chinese Maritime Transport | Macauto Industrial vs. Song Ho Industrial |
| Actron Technology vs. Cayenne Entertainment Technology | Actron Technology vs. U Tech Media Corp | Actron Technology vs. AVerMedia Technologies | Actron Technology vs. Sunspring Metal Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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