Correlation Between Actinogen Medical and EROAD
Can any of the company-specific risk be diversified away by investing in both Actinogen Medical and EROAD 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 EROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Actinogen Medical and EROAD, you can compare the effects of market volatilities on Actinogen Medical and EROAD 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 EROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actinogen Medical and EROAD.
Diversification Opportunities for Actinogen Medical and EROAD
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Actinogen and EROAD is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Actinogen Medical and EROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EROAD 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 EROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EROAD has no effect on the direction of Actinogen Medical i.e., Actinogen Medical and EROAD go up and down completely randomly.
Pair Corralation between Actinogen Medical and EROAD
Assuming the 90 days trading horizon Actinogen Medical is expected to generate 2.17 times more return on investment than EROAD. However, Actinogen Medical is 2.17 times more volatile than EROAD. It trades about 0.06 of its potential returns per unit of risk. EROAD is currently generating about 0.09 per unit of risk. If you would invest 2.50 in Actinogen Medical on August 31, 2024 and sell it today you would earn a total of 0.10 from holding Actinogen Medical or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Actinogen Medical vs. EROAD
Performance |
| Timeline |
| Actinogen Medical |
| EROAD |
Actinogen Medical and EROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Actinogen Medical and EROAD
The main advantage of trading using opposite Actinogen Medical and EROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actinogen Medical position performs unexpectedly, EROAD 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 EROAD will offset losses from the drop in EROAD's long position.| Actinogen Medical vs. Aneka Tambang Tbk | Actinogen Medical vs. Woolworths | Actinogen Medical vs. Commonwealth Bank | Actinogen Medical vs. BHP Group Limited |
| EROAD vs. Duxton Broadacre Farms | EROAD vs. Centaurus Metals | EROAD vs. Dicker Data | EROAD vs. Leeuwin Metals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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