Correlation Between AddTech Hub and NAT ABSOLUTE
Can any of the company-specific risk be diversified away by investing in both AddTech Hub and NAT ABSOLUTE 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 AddTech Hub and NAT ABSOLUTE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AddTech Hub Public and NAT ABSOLUTE TECHNOLOGIES, you can compare the effects of market volatilities on AddTech Hub and NAT ABSOLUTE 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 AddTech Hub with a short position of NAT ABSOLUTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddTech Hub and NAT ABSOLUTE.
Diversification Opportunities for AddTech Hub and NAT ABSOLUTE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AddTech and NAT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AddTech Hub Public and NAT ABSOLUTE TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAT ABSOLUTE TECHNOLOGIES and AddTech Hub 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 AddTech Hub Public are associated (or correlated) with NAT ABSOLUTE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAT ABSOLUTE TECHNOLOGIES has no effect on the direction of AddTech Hub i.e., AddTech Hub and NAT ABSOLUTE go up and down completely randomly.
Pair Corralation between AddTech Hub and NAT ABSOLUTE
Assuming the 90 days trading horizon AddTech Hub Public is expected to generate 1.11 times more return on investment than NAT ABSOLUTE. However, AddTech Hub is 1.11 times more volatile than NAT ABSOLUTE TECHNOLOGIES. It trades about -0.13 of its potential returns per unit of risk. NAT ABSOLUTE TECHNOLOGIES is currently generating about -0.49 per unit of risk. If you would invest 473.00 in AddTech Hub Public on August 30, 2024 and sell it today you would lose (15.00) from holding AddTech Hub Public or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AddTech Hub Public vs. NAT ABSOLUTE TECHNOLOGIES
Performance |
| Timeline |
| AddTech Hub Public |
| NAT ABSOLUTE TECHNOLOGIES |
AddTech Hub and NAT ABSOLUTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AddTech Hub and NAT ABSOLUTE
The main advantage of trading using opposite AddTech Hub and NAT ABSOLUTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AddTech Hub position performs unexpectedly, NAT ABSOLUTE 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 NAT ABSOLUTE will offset losses from the drop in NAT ABSOLUTE's long position.| AddTech Hub vs. Forth Public | AddTech Hub vs. After You Public | AddTech Hub vs. The Erawan Group | AddTech Hub vs. Airports of Thailand |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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