Correlation Between Albion Technology and Greatland Gold
Can any of the company-specific risk be diversified away by investing in both Albion Technology and Greatland Gold 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 Greatland Gold 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 Greatland Gold plc, you can compare the effects of market volatilities on Albion Technology and Greatland Gold 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 Greatland Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Greatland Gold.
Diversification Opportunities for Albion Technology and Greatland Gold
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Albion and Greatland is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Greatland Gold plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatland Gold 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 Greatland Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatland Gold plc has no effect on the direction of Albion Technology i.e., Albion Technology and Greatland Gold go up and down completely randomly.
Pair Corralation between Albion Technology and Greatland Gold
Assuming the 90 days trading horizon Albion Technology General is expected to generate 0.2 times more return on investment than Greatland Gold. However, Albion Technology General is 5.01 times less risky than Greatland Gold. It trades about -0.05 of its potential returns per unit of risk. Greatland Gold plc is currently generating about -0.15 per unit of risk. If you would invest 6,850 in Albion Technology General on October 7, 2024 and sell it today you would lose (50.00) from holding Albion Technology General or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Albion Technology General vs. Greatland Gold plc
Performance |
| Timeline |
| Albion Technology General |
| Greatland Gold plc |
Albion Technology and Greatland Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Greatland Gold
The main advantage of trading using opposite Albion Technology and Greatland Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, Greatland Gold 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 Greatland Gold will offset losses from the drop in Greatland Gold's long position.| Albion Technology vs. Toyota Motor Corp | Albion Technology vs. OTP Bank Nyrt | Albion Technology vs. Agilent Technologies | Albion Technology vs. Newmont Corp |
| Greatland Gold vs. MediaZest plc | Greatland Gold vs. XLMedia PLC | Greatland Gold vs. Norman Broadbent Plc | Greatland Gold vs. Liberty Media Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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