Correlation Between AddTech Hub and Sun Vending
Can any of the company-specific risk be diversified away by investing in both AddTech Hub and Sun Vending 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 Sun Vending 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 Sun Vending Technology, you can compare the effects of market volatilities on AddTech Hub and Sun Vending 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 Sun Vending. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddTech Hub and Sun Vending.
Diversification Opportunities for AddTech Hub and Sun Vending
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AddTech and Sun is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AddTech Hub Public and Sun Vending Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Vending Technology 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 Sun Vending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Vending Technology has no effect on the direction of AddTech Hub i.e., AddTech Hub and Sun Vending go up and down completely randomly.
Pair Corralation between AddTech Hub and Sun Vending
Assuming the 90 days trading horizon AddTech Hub Public is expected to generate 0.61 times more return on investment than Sun Vending. However, AddTech Hub Public is 1.63 times less risky than Sun Vending. It trades about 0.03 of its potential returns per unit of risk. Sun Vending Technology is currently generating about -0.06 per unit of risk. If you would invest 451.00 in AddTech Hub Public on September 3, 2024 and sell it today you would earn a total of 11.00 from holding AddTech Hub Public or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AddTech Hub Public vs. Sun Vending Technology
Performance |
| Timeline |
| AddTech Hub Public |
| Sun Vending Technology |
AddTech Hub and Sun Vending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AddTech Hub and Sun Vending
The main advantage of trading using opposite AddTech Hub and Sun Vending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AddTech Hub position performs unexpectedly, Sun Vending 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 Sun Vending will offset losses from the drop in Sun Vending's long position.| AddTech Hub vs. Forth Public | AddTech Hub vs. Ditto Public | AddTech Hub vs. II Group Public | AddTech Hub vs. After You Public |
| Sun Vending vs. Hana Microelectronics Public | Sun Vending vs. Global Power Synergy | Sun Vending vs. Siam Global House | Sun Vending vs. Gulf Energy Development |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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