Correlation Between Albion Technology and Made Tech
Can any of the company-specific risk be diversified away by investing in both Albion Technology and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Albion Technology and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Made Tech.
Diversification Opportunities for Albion Technology and Made Tech
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Albion and Made is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Albion Technology i.e., Albion Technology and Made Tech go up and down completely randomly.
Pair Corralation between Albion Technology and Made Tech
Assuming the 90 days trading horizon Albion Technology is expected to generate 6.67 times less return on investment than Made Tech. But when comparing it to its historical volatility, Albion Technology General is 6.56 times less risky than Made Tech. It trades about 0.02 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Made Tech Group on August 30, 2024 and sell it today you would lose (270.00) from holding Made Tech Group or give up 10.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. Made Tech Group
Performance |
| Timeline |
| Albion Technology General |
| Made Tech Group |
Albion Technology and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Made Tech
The main advantage of trading using opposite Albion Technology and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Lendinvest PLC | Albion Technology vs. Neometals | Albion Technology vs. Coor Service Management |
| Made Tech vs. Samsung Electronics Co | Made Tech vs. Samsung Electronics Co | Made Tech vs. Toyota Motor Corp | Made Tech vs. Reliance Industries Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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