Correlation Between AB International and NeoMedia Technologies
Can any of the company-specific risk be diversified away by investing in both AB International and NeoMedia Technologies 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 AB International and NeoMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB International Group and NeoMedia Technologies, you can compare the effects of market volatilities on AB International and NeoMedia Technologies 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 AB International with a short position of NeoMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB International and NeoMedia Technologies.
Diversification Opportunities for AB International and NeoMedia Technologies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABQQ and NeoMedia is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding AB International Group and NeoMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoMedia Technologies and AB International 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 AB International Group are associated (or correlated) with NeoMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoMedia Technologies has no effect on the direction of AB International i.e., AB International and NeoMedia Technologies go up and down completely randomly.
Pair Corralation between AB International and NeoMedia Technologies
Given the investment horizon of 90 days AB International is expected to generate 6.67 times less return on investment than NeoMedia Technologies. But when comparing it to its historical volatility, AB International Group is 5.8 times less risky than NeoMedia Technologies. It trades about 0.12 of its potential returns per unit of risk. NeoMedia Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.02 in NeoMedia Technologies on August 28, 2024 and sell it today you would lose (0.01) from holding NeoMedia Technologies or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.89% |
| Values | Daily Returns |
AB International Group vs. NeoMedia Technologies
Performance |
| Timeline |
| AB International |
| NeoMedia Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AB International and NeoMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB International and NeoMedia Technologies
The main advantage of trading using opposite AB International and NeoMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB International position performs unexpectedly, NeoMedia Technologies 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 NeoMedia Technologies will offset losses from the drop in NeoMedia Technologies' long position.| AB International vs. Boxlight Corp Class | AB International vs. Siyata Mobile | AB International vs. ClearOne | AB International vs. HUMANA INC |
| NeoMedia Technologies vs. AB International Group | NeoMedia Technologies vs. Peer To Peer | NeoMedia Technologies vs. AppYea Inc | NeoMedia Technologies vs. BASE Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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