Correlation Between ACDC Metals and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both ACDC Metals and AiMedia Technologies 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 ACDC Metals and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and AiMedia Technologies, you can compare the effects of market volatilities on ACDC Metals and AiMedia Technologies 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 ACDC Metals with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and AiMedia Technologies.
Diversification Opportunities for ACDC Metals and AiMedia Technologies
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ACDC and AiMedia is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and ACDC Metals 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 ACDC Metals are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of ACDC Metals i.e., ACDC Metals and AiMedia Technologies go up and down completely randomly.
Pair Corralation between ACDC Metals and AiMedia Technologies
Assuming the 90 days trading horizon ACDC Metals is expected to under-perform the AiMedia Technologies. In addition to that, ACDC Metals is 1.11 times more volatile than AiMedia Technologies. It trades about -0.02 of its total potential returns per unit of risk. AiMedia Technologies is currently generating about 0.16 per unit of volatility. If you would invest 35.00 in AiMedia Technologies on September 3, 2024 and sell it today you would earn a total of 47.00 from holding AiMedia Technologies or generate 134.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. AiMedia Technologies
Performance |
| Timeline |
| ACDC Metals |
| AiMedia Technologies |
ACDC Metals and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and AiMedia Technologies
The main advantage of trading using opposite ACDC Metals and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| ACDC Metals vs. Northern Star Resources | ACDC Metals vs. Evolution Mining | ACDC Metals vs. Bluescope Steel | ACDC Metals vs. Aneka Tambang Tbk |
| AiMedia Technologies vs. Encounter Resources | AiMedia Technologies vs. Tlou Energy | AiMedia Technologies vs. Superior Resources | AiMedia Technologies vs. Peel Mining |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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