Correlation Between AAC TECHNOLOGHLDGADR and Cars
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Cars 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 Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Cars Inc, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Cars.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Cars
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AAC and Cars is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Cars go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Cars
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.55 times less return on investment than Cars. In addition to that, AAC TECHNOLOGHLDGADR is 1.42 times more volatile than Cars Inc. It trades about 0.1 of its total potential returns per unit of risk. Cars Inc is currently generating about 0.23 per unit of volatility. If you would invest 1,440 in Cars Inc on September 3, 2024 and sell it today you would earn a total of 410.00 from holding Cars Inc or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Cars Inc
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Cars Inc |
AAC TECHNOLOGHLDGADR and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Cars
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Motorola Solutions | AAC TECHNOLOGHLDGADR vs. Nokia |
| Cars vs. Tower One Wireless | Cars vs. Corporate Office Properties | Cars vs. Check Point Software | Cars vs. MACOM Technology Solutions |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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