Correlation Between Albion Technology and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Albion Technology and Advanced Medical 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 Albion Technology and Advanced Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Advanced Medical Solutions, you can compare the effects of market volatilities on Albion Technology and Advanced Medical 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 Albion Technology with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Advanced Medical.
Diversification Opportunities for Albion Technology and Advanced Medical
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albion and Advanced is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol and Albion Technology 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 Albion Technology General are associated (or correlated) with Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Albion Technology i.e., Albion Technology and Advanced Medical go up and down completely randomly.
Pair Corralation between Albion Technology and Advanced Medical
Assuming the 90 days trading horizon Albion Technology is expected to generate 11.39 times less return on investment than Advanced Medical. But when comparing it to its historical volatility, Albion Technology General is 3.28 times less risky than Advanced Medical. It trades about 0.03 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 19,700 in Advanced Medical Solutions on August 27, 2024 and sell it today you would earn a total of 1,300 from holding Advanced Medical Solutions or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. Advanced Medical Solutions
Performance |
| Timeline |
| Albion Technology General |
| Advanced Medical Sol |
Albion Technology and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Advanced Medical
The main advantage of trading using opposite Albion Technology and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Hyundai Motor | Albion Technology vs. Toyota Motor Corp |
| Advanced Medical vs. Home Depot | Advanced Medical vs. Weiss Korea Opportunity | Advanced Medical vs. Chrysalis Investments | Advanced Medical vs. Coca Cola Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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