Correlation Between AAC TECHNOLOGHLDGADR and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Spirent Communications 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 AAC TECHNOLOGHLDGADR and Spirent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Spirent Communications plc, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Spirent Communications 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 AAC TECHNOLOGHLDGADR with a short position of Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Spirent Communications.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Spirent Communications
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AAC and Spirent is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Spirent Communications go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Spirent Communications
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 0.73 times more return on investment than Spirent Communications. However, AAC TECHNOLOGHLDGADR is 1.37 times less risky than Spirent Communications. It trades about 0.07 of its potential returns per unit of risk. Spirent Communications plc is currently generating about -0.03 per unit of risk. If you would invest 458.00 in AAC TECHNOLOGHLDGADR on November 3, 2024 and sell it today you would earn a total of 16.00 from holding AAC TECHNOLOGHLDGADR or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Spirent Communications plc
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Spirent Communications |
AAC TECHNOLOGHLDGADR and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Spirent Communications
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| AAC TECHNOLOGHLDGADR vs. MARKET VECTR RETAIL | AAC TECHNOLOGHLDGADR vs. Caseys General Stores | AAC TECHNOLOGHLDGADR vs. National Retail Properties | AAC TECHNOLOGHLDGADR vs. Northern Data AG |
| Spirent Communications vs. Insurance Australia Group | Spirent Communications vs. Reinsurance Group of | Spirent Communications vs. Zurich Insurance Group | Spirent Communications vs. QBE Insurance Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |