Correlation Between Aroundtown and Wetouch Technology
Can any of the company-specific risk be diversified away by investing in both Aroundtown and Wetouch Technology 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 Aroundtown and Wetouch Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aroundtown SA and Wetouch Technology Common, you can compare the effects of market volatilities on Aroundtown and Wetouch Technology 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 Aroundtown with a short position of Wetouch Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aroundtown and Wetouch Technology.
Diversification Opportunities for Aroundtown and Wetouch Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aroundtown and Wetouch is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aroundtown SA and Wetouch Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wetouch Technology Common and Aroundtown 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 Aroundtown SA are associated (or correlated) with Wetouch Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wetouch Technology Common has no effect on the direction of Aroundtown i.e., Aroundtown and Wetouch Technology go up and down completely randomly.
Pair Corralation between Aroundtown and Wetouch Technology
Assuming the 90 days horizon Aroundtown is expected to generate 5.16 times less return on investment than Wetouch Technology. But when comparing it to its historical volatility, Aroundtown SA is 3.49 times less risky than Wetouch Technology. It trades about 0.03 of its potential returns per unit of risk. Wetouch Technology Common is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 740.00 in Wetouch Technology Common on August 28, 2024 and sell it today you would lose (562.00) from holding Wetouch Technology Common or give up 75.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aroundtown SA vs. Wetouch Technology Common
Performance |
| Timeline |
| Aroundtown SA |
| Wetouch Technology Common |
Aroundtown and Wetouch Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aroundtown and Wetouch Technology
The main advantage of trading using opposite Aroundtown and Wetouch Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aroundtown position performs unexpectedly, Wetouch Technology 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 Wetouch Technology will offset losses from the drop in Wetouch Technology's long position.| Aroundtown vs. Asia Pptys | Aroundtown vs. Adler Group SA | Aroundtown vs. Aztec Land Comb | Aroundtown vs. Ambase Corp |
| Wetouch Technology vs. Tree Island Steel | Wetouch Technology vs. Santeon Group | Wetouch Technology vs. Ferrexpo PLC | Wetouch Technology vs. Aquagold International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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