Correlation Between Abaxx Technologies and Power Financial
Can any of the company-specific risk be diversified away by investing in both Abaxx Technologies and Power Financial 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 Abaxx Technologies and Power Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abaxx Technologies and Power Financial Corp, you can compare the effects of market volatilities on Abaxx Technologies and Power Financial 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 Abaxx Technologies with a short position of Power Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abaxx Technologies and Power Financial.
Diversification Opportunities for Abaxx Technologies and Power Financial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Abaxx and Power is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Abaxx Technologies and Power Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Financial Corp and Abaxx Technologies 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 Abaxx Technologies are associated (or correlated) with Power Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Financial Corp has no effect on the direction of Abaxx Technologies i.e., Abaxx Technologies and Power Financial go up and down completely randomly.
Pair Corralation between Abaxx Technologies and Power Financial
Assuming the 90 days trading horizon Abaxx Technologies is expected to under-perform the Power Financial. In addition to that, Abaxx Technologies is 1.16 times more volatile than Power Financial Corp. It trades about -0.2 of its total potential returns per unit of risk. Power Financial Corp is currently generating about 0.05 per unit of volatility. If you would invest 1,665 in Power Financial Corp on November 9, 2024 and sell it today you would earn a total of 10.00 from holding Power Financial Corp or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.82% |
| Values | Daily Returns |
Abaxx Technologies vs. Power Financial Corp
Performance |
| Timeline |
| Abaxx Technologies |
| Power Financial Corp |
Abaxx Technologies and Power Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abaxx Technologies and Power Financial
The main advantage of trading using opposite Abaxx Technologies and Power Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abaxx Technologies position performs unexpectedly, Power Financial 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 Power Financial will offset losses from the drop in Power Financial's long position.| Abaxx Technologies vs. Sparx Technology | Abaxx Technologies vs. Plaza Retail REIT | Abaxx Technologies vs. Costco Wholesale Corp | Abaxx Technologies vs. Air Canada |
| Power Financial vs. CI Financial Corp | Power Financial vs. North American Financial | Power Financial vs. Sun Peak Metals | Power Financial vs. Financial 15 Split |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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