Correlation Between AAC TECHNOLOGHLDGADR and Stewart Information
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Stewart Information 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 Stewart Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Stewart Information Services, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Stewart Information 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 Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Stewart Information.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Stewart Information
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AAC and Stewart is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information 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 Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Stewart Information go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Stewart Information
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.78 times more return on investment than Stewart Information. However, AAC TECHNOLOGHLDGADR is 1.78 times more volatile than Stewart Information Services. It trades about 0.17 of its potential returns per unit of risk. Stewart Information Services is currently generating about 0.23 per unit of risk. If you would invest 374.00 in AAC TECHNOLOGHLDGADR on August 28, 2024 and sell it today you would earn a total of 50.00 from holding AAC TECHNOLOGHLDGADR or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Stewart Information Services
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Stewart Information |
AAC TECHNOLOGHLDGADR and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Stewart Information
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information's long position.| AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Telefonaktiebolaget LM Ericsson | AAC TECHNOLOGHLDGADR vs. Superior Plus Corp | AAC TECHNOLOGHLDGADR vs. NMI Holdings |
| Stewart Information vs. Superior Plus Corp | Stewart Information vs. NMI Holdings | Stewart Information vs. Origin Agritech | Stewart Information vs. SIVERS SEMICONDUCTORS AB |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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