Correlation Between Access Power and IDT
Can any of the company-specific risk be diversified away by investing in both Access Power and IDT 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 Access Power and IDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Power Co and IDT Corporation, you can compare the effects of market volatilities on Access Power and IDT 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 Access Power with a short position of IDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Power and IDT.
Diversification Opportunities for Access Power and IDT
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Access and IDT is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Access Power Co and IDT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDT Corporation and Access Power 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 Access Power Co are associated (or correlated) with IDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDT Corporation has no effect on the direction of Access Power i.e., Access Power and IDT go up and down completely randomly.
Pair Corralation between Access Power and IDT
Given the investment horizon of 90 days Access Power Co is expected to generate 22.13 times more return on investment than IDT. However, Access Power is 22.13 times more volatile than IDT Corporation. It trades about 0.22 of its potential returns per unit of risk. IDT Corporation is currently generating about 0.26 per unit of risk. If you would invest 0.10 in Access Power Co on September 1, 2024 and sell it today you would earn a total of 0.07 from holding Access Power Co or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Access Power Co vs. IDT Corp.
Performance |
| Timeline |
| Access Power |
| IDT Corporation |
Access Power and IDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Power and IDT
The main advantage of trading using opposite Access Power and IDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Power position performs unexpectedly, IDT 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 IDT will offset losses from the drop in IDT's long position.| Access Power vs. BCE Inc | Access Power vs. Axiologix | Access Power vs. Advanced Info Service | Access Power vs. American Nortel Communications |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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