Correlation Between Albion Technology and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Albion Technology and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Albion Technology and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and International Consolidated.
Diversification Opportunities for Albion Technology and International Consolidated
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Albion and International is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Albion Technology i.e., Albion Technology and International Consolidated go up and down completely randomly.
Pair Corralation between Albion Technology and International Consolidated
Assuming the 90 days trading horizon Albion Technology General is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Albion Technology General is 1.44 times less risky than International Consolidated. The stock trades about -0.04 of its potential returns per unit of risk. The International Consolidated Airlines is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 21,530 in International Consolidated Airlines on August 29, 2024 and sell it today you would earn a total of 3,760 from holding International Consolidated Airlines or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. International Consolidated Air
Performance |
| Timeline |
| Albion Technology General |
| International Consolidated |
Albion Technology and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and International Consolidated
The main advantage of trading using opposite Albion Technology and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Lendinvest PLC | Albion Technology vs. Neometals | Albion Technology vs. Coor Service Management |
| International Consolidated vs. Lendinvest PLC | International Consolidated vs. Neometals | International Consolidated vs. Coor Service Management | International Consolidated 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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