Correlation Between Amedeo Air and Anglo Eastern
Can any of the company-specific risk be diversified away by investing in both Amedeo Air and Anglo Eastern 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 Amedeo Air and Anglo Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and Anglo Eastern Plantations PLC, you can compare the effects of market volatilities on Amedeo Air and Anglo Eastern 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 Amedeo Air with a short position of Anglo Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and Anglo Eastern.
Diversification Opportunities for Amedeo Air and Anglo Eastern
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amedeo and Anglo is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and Anglo Eastern Plantations PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Eastern Planta and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with Anglo Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Eastern Planta has no effect on the direction of Amedeo Air i.e., Amedeo Air and Anglo Eastern go up and down completely randomly.
Pair Corralation between Amedeo Air and Anglo Eastern
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 0.37 times more return on investment than Anglo Eastern. However, Amedeo Air Four is 2.71 times less risky than Anglo Eastern. It trades about 0.48 of its potential returns per unit of risk. Anglo Eastern Plantations PLC is currently generating about -0.01 per unit of risk. If you would invest 5,000 in Amedeo Air Four on September 4, 2024 and sell it today you would earn a total of 340.00 from holding Amedeo Air Four or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amedeo Air Four vs. Anglo Eastern Plantations PLC
Performance |
| Timeline |
| Amedeo Air Four |
| Anglo Eastern Planta |
Amedeo Air and Anglo Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and Anglo Eastern
The main advantage of trading using opposite Amedeo Air and Anglo Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air position performs unexpectedly, Anglo Eastern 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 Anglo Eastern will offset losses from the drop in Anglo Eastern's long position.| Amedeo Air vs. Samsung Electronics Co | Amedeo Air vs. Samsung Electronics Co | Amedeo Air vs. Hyundai Motor | Amedeo Air vs. Toyota Motor Corp |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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