Correlation Between ABSOLUTE CLEAN and Halcyon Technology
Can any of the company-specific risk be diversified away by investing in both ABSOLUTE CLEAN and Halcyon Technology 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 ABSOLUTE CLEAN and Halcyon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABSOLUTE CLEAN ENERGY and Halcyon Technology Public, you can compare the effects of market volatilities on ABSOLUTE CLEAN and Halcyon Technology 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 ABSOLUTE CLEAN with a short position of Halcyon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABSOLUTE CLEAN and Halcyon Technology.
Diversification Opportunities for ABSOLUTE CLEAN and Halcyon Technology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABSOLUTE and Halcyon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ABSOLUTE CLEAN ENERGY and Halcyon Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halcyon Technology Public and ABSOLUTE CLEAN 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 ABSOLUTE CLEAN ENERGY are associated (or correlated) with Halcyon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halcyon Technology Public has no effect on the direction of ABSOLUTE CLEAN i.e., ABSOLUTE CLEAN and Halcyon Technology go up and down completely randomly.
Pair Corralation between ABSOLUTE CLEAN and Halcyon Technology
Assuming the 90 days trading horizon ABSOLUTE CLEAN is expected to generate 61.62 times less return on investment than Halcyon Technology. But when comparing it to its historical volatility, ABSOLUTE CLEAN ENERGY is 2.88 times less risky than Halcyon Technology. It trades about 0.0 of its potential returns per unit of risk. Halcyon Technology Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 340.00 in Halcyon Technology Public on November 29, 2024 and sell it today you would earn a total of 10.00 from holding Halcyon Technology Public or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABSOLUTE CLEAN ENERGY vs. Halcyon Technology Public
Performance |
| Timeline |
| ABSOLUTE CLEAN ENERGY |
| Halcyon Technology Public |
ABSOLUTE CLEAN and Halcyon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABSOLUTE CLEAN and Halcyon Technology
The main advantage of trading using opposite ABSOLUTE CLEAN and Halcyon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABSOLUTE CLEAN position performs unexpectedly, Halcyon Technology 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 Halcyon Technology will offset losses from the drop in Halcyon Technology's long position.| ABSOLUTE CLEAN vs. Absolute Clean Energy | ABSOLUTE CLEAN vs. Super Energy | ABSOLUTE CLEAN vs. TPI Polene Power | ABSOLUTE CLEAN vs. CK Power Public |
| Halcyon Technology vs. Hwa Fong Rubber | Halcyon Technology vs. Haad Thip Public | Halcyon Technology vs. Ichitan Group Public | Halcyon Technology vs. Hana Microelectronics Public |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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