Correlation Between AAC Clyde and Ensurge Micropower
Can any of the company-specific risk be diversified away by investing in both AAC Clyde and Ensurge Micropower 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 AAC Clyde and Ensurge Micropower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC Clyde Space and Ensurge Micropower ASA, you can compare the effects of market volatilities on AAC Clyde and Ensurge Micropower 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 AAC Clyde with a short position of Ensurge Micropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Clyde and Ensurge Micropower.
Diversification Opportunities for AAC Clyde and Ensurge Micropower
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AAC and Ensurge is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AAC Clyde Space and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA and AAC Clyde 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 AAC Clyde Space are associated (or correlated) with Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of AAC Clyde i.e., AAC Clyde and Ensurge Micropower go up and down completely randomly.
Pair Corralation between AAC Clyde and Ensurge Micropower
Assuming the 90 days horizon AAC Clyde is expected to generate 10.33 times less return on investment than Ensurge Micropower. But when comparing it to its historical volatility, AAC Clyde Space is 2.28 times less risky than Ensurge Micropower. It trades about 0.05 of its potential returns per unit of risk. Ensurge Micropower ASA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 492.00 in Ensurge Micropower ASA on September 14, 2024 and sell it today you would lose (463.00) from holding Ensurge Micropower ASA or give up 94.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.77% |
| Values | Daily Returns |
AAC Clyde Space vs. Ensurge Micropower ASA
Performance |
| Timeline |
| AAC Clyde Space |
| Ensurge Micropower ASA |
AAC Clyde and Ensurge Micropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC Clyde and Ensurge Micropower
The main advantage of trading using opposite AAC Clyde and Ensurge Micropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC Clyde position performs unexpectedly, Ensurge Micropower 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 Ensurge Micropower will offset losses from the drop in Ensurge Micropower's long position.| AAC Clyde vs. VirTra Inc | AAC Clyde vs. BWX Technologies | AAC Clyde vs. Embraer SA ADR | AAC Clyde vs. HEICO |
| Ensurge Micropower vs. Ensurge Micropower ASA | Ensurge Micropower vs. AAC Clyde Space | Ensurge Micropower vs. Ynvisible Interactive | Ensurge Micropower vs. World Technology Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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