Correlation Between Abingdon Health and Orient Telecoms
Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Orient Telecoms 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 Abingdon Health and Orient Telecoms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Orient Telecoms, you can compare the effects of market volatilities on Abingdon Health and Orient Telecoms 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 Abingdon Health with a short position of Orient Telecoms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Orient Telecoms.
Diversification Opportunities for Abingdon Health and Orient Telecoms
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abingdon and Orient is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Orient Telecoms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Telecoms and Abingdon Health 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 Abingdon Health Plc are associated (or correlated) with Orient Telecoms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Telecoms has no effect on the direction of Abingdon Health i.e., Abingdon Health and Orient Telecoms go up and down completely randomly.
Pair Corralation between Abingdon Health and Orient Telecoms
Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 2.29 times more return on investment than Orient Telecoms. However, Abingdon Health is 2.29 times more volatile than Orient Telecoms. It trades about 0.04 of its potential returns per unit of risk. Orient Telecoms is currently generating about -0.04 per unit of risk. If you would invest 550.00 in Abingdon Health Plc on November 7, 2024 and sell it today you would earn a total of 250.00 from holding Abingdon Health Plc or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abingdon Health Plc vs. Orient Telecoms
Performance |
| Timeline |
| Abingdon Health Plc |
| Orient Telecoms |
Abingdon Health and Orient Telecoms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Orient Telecoms
The main advantage of trading using opposite Abingdon Health and Orient Telecoms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health position performs unexpectedly, Orient Telecoms 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 Orient Telecoms will offset losses from the drop in Orient Telecoms' long position.| Abingdon Health vs. Vitec Software Group | Abingdon Health vs. Herald Investment Trust | Abingdon Health vs. Take Two Interactive Software | Abingdon Health vs. Chrysalis Investments |
| Orient Telecoms vs. Power Metal Resources | Orient Telecoms vs. Sovereign Metals | Orient Telecoms vs. Golden Metal Resources | Orient Telecoms vs. Alien Metals |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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