Correlation Between AAC TECHNOLOGHLDGADR and Oriola Oyj
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Oriola Oyj 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 Oriola Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Oriola Oyj, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Oriola Oyj 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 Oriola Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Oriola Oyj.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Oriola Oyj
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AAC and Oriola is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Oriola Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriola Oyj 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 Oriola Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriola Oyj has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Oriola Oyj go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Oriola Oyj
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 2.0 times more return on investment than Oriola Oyj. However, AAC TECHNOLOGHLDGADR is 2.0 times more volatile than Oriola Oyj. It trades about 0.08 of its potential returns per unit of risk. Oriola Oyj is currently generating about -0.04 per unit of risk. If you would invest 175.00 in AAC TECHNOLOGHLDGADR on November 3, 2024 and sell it today you would earn a total of 295.00 from holding AAC TECHNOLOGHLDGADR or generate 168.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Oriola Oyj
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Oriola Oyj |
AAC TECHNOLOGHLDGADR and Oriola Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Oriola Oyj
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Oriola Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Oriola Oyj 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 Oriola Oyj will offset losses from the drop in Oriola Oyj's long position.| AAC TECHNOLOGHLDGADR vs. Waste Management | AAC TECHNOLOGHLDGADR vs. INSURANCE AUST GRP | AAC TECHNOLOGHLDGADR vs. Reinsurance Group of | AAC TECHNOLOGHLDGADR vs. Goosehead Insurance |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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