Correlation Between Actinogen Medical and Cochlear
Can any of the company-specific risk be diversified away by investing in both Actinogen Medical and Cochlear 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 Actinogen Medical and Cochlear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Actinogen Medical and Cochlear, you can compare the effects of market volatilities on Actinogen Medical and Cochlear 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 Actinogen Medical with a short position of Cochlear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actinogen Medical and Cochlear.
Diversification Opportunities for Actinogen Medical and Cochlear
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Actinogen and Cochlear is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Actinogen Medical and Cochlear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cochlear and Actinogen Medical 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 Actinogen Medical are associated (or correlated) with Cochlear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cochlear has no effect on the direction of Actinogen Medical i.e., Actinogen Medical and Cochlear go up and down completely randomly.
Pair Corralation between Actinogen Medical and Cochlear
Assuming the 90 days trading horizon Actinogen Medical is expected to generate 7.52 times more return on investment than Cochlear. However, Actinogen Medical is 7.52 times more volatile than Cochlear. It trades about 0.05 of its potential returns per unit of risk. Cochlear is currently generating about -0.02 per unit of risk. If you would invest 2.90 in Actinogen Medical on August 28, 2024 and sell it today you would lose (0.40) from holding Actinogen Medical or give up 13.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Actinogen Medical vs. Cochlear
Performance |
| Timeline |
| Actinogen Medical |
| Cochlear |
Actinogen Medical and Cochlear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Actinogen Medical and Cochlear
The main advantage of trading using opposite Actinogen Medical and Cochlear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actinogen Medical position performs unexpectedly, Cochlear 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 Cochlear will offset losses from the drop in Cochlear's long position.| Actinogen Medical vs. Aneka Tambang Tbk | Actinogen Medical vs. Rio Tinto | Actinogen Medical vs. BHP Group Limited | Actinogen Medical vs. Block Inc |
| Cochlear vs. Red Hill Iron | Cochlear vs. Cleanaway Waste Management | Cochlear vs. Actinogen Medical | Cochlear vs. Autosports Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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