Correlation Between Asia Broadband and Huntsman Exploration
Can any of the company-specific risk be diversified away by investing in both Asia Broadband and Huntsman Exploration 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 Asia Broadband and Huntsman Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Broadband and Huntsman Exploration, you can compare the effects of market volatilities on Asia Broadband and Huntsman Exploration 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 Asia Broadband with a short position of Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Broadband and Huntsman Exploration.
Diversification Opportunities for Asia Broadband and Huntsman Exploration
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asia and Huntsman is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Asia Broadband and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration and Asia Broadband 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 Asia Broadband are associated (or correlated) with Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Asia Broadband i.e., Asia Broadband and Huntsman Exploration go up and down completely randomly.
Pair Corralation between Asia Broadband and Huntsman Exploration
Given the investment horizon of 90 days Asia Broadband is expected to generate 9.83 times less return on investment than Huntsman Exploration. But when comparing it to its historical volatility, Asia Broadband is 6.45 times less risky than Huntsman Exploration. It trades about 0.04 of its potential returns per unit of risk. Huntsman Exploration is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Huntsman Exploration on September 14, 2024 and sell it today you would earn a total of 0.40 from holding Huntsman Exploration or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Asia Broadband vs. Huntsman Exploration
Performance |
| Timeline |
| Asia Broadband |
| Huntsman Exploration |
Asia Broadband and Huntsman Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Broadband and Huntsman Exploration
The main advantage of trading using opposite Asia Broadband and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Broadband position performs unexpectedly, Huntsman Exploration 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.| Asia Broadband vs. Fury Gold Mines | Asia Broadband vs. Lion Copper and | Asia Broadband vs. Trilogy Metals | Asia Broadband vs. Western Copper and |
| Huntsman Exploration vs. Qubec Nickel Corp | Huntsman Exploration vs. IGO Limited | Huntsman Exploration vs. Focus Graphite | Huntsman Exploration vs. Mineral Res |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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