Correlation Between Albion Technology and Cadogan Petroleum
Can any of the company-specific risk be diversified away by investing in both Albion Technology and Cadogan Petroleum 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 Cadogan Petroleum 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 Cadogan Petroleum plc, you can compare the effects of market volatilities on Albion Technology and Cadogan Petroleum 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 Cadogan Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Cadogan Petroleum.
Diversification Opportunities for Albion Technology and Cadogan Petroleum
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Albion and Cadogan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Cadogan Petroleum plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadogan Petroleum plc 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 Cadogan Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadogan Petroleum plc has no effect on the direction of Albion Technology i.e., Albion Technology and Cadogan Petroleum go up and down completely randomly.
Pair Corralation between Albion Technology and Cadogan Petroleum
Assuming the 90 days trading horizon Albion Technology is expected to generate 5.93 times less return on investment than Cadogan Petroleum. But when comparing it to its historical volatility, Albion Technology General is 4.49 times less risky than Cadogan Petroleum. It trades about 0.02 of its potential returns per unit of risk. Cadogan Petroleum plc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Cadogan Petroleum plc on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Cadogan Petroleum plc or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Albion Technology General vs. Cadogan Petroleum plc
Performance |
| Timeline |
| Albion Technology General |
| Cadogan Petroleum plc |
Albion Technology and Cadogan Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Cadogan Petroleum
The main advantage of trading using opposite Albion Technology and Cadogan Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, Cadogan Petroleum 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 Cadogan Petroleum will offset losses from the drop in Cadogan Petroleum's long position.| Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Neometals | Albion Technology vs. Coor Service Management | Albion Technology vs. JPMorgan ETFs ICAV |
| Cadogan Petroleum vs. Lendinvest PLC | Cadogan Petroleum vs. Neometals | Cadogan Petroleum vs. Coor Service Management | Cadogan Petroleum vs. Albion Technology General |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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