Correlation Between Advtech and Trellidor Holdings
Can any of the company-specific risk be diversified away by investing in both Advtech and Trellidor Holdings 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 Advtech and Trellidor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advtech and Trellidor Holdings, you can compare the effects of market volatilities on Advtech and Trellidor Holdings 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 Advtech with a short position of Trellidor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advtech and Trellidor Holdings.
Diversification Opportunities for Advtech and Trellidor Holdings
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advtech and Trellidor is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Advtech and Trellidor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellidor Holdings and Advtech 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 Advtech are associated (or correlated) with Trellidor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellidor Holdings has no effect on the direction of Advtech i.e., Advtech and Trellidor Holdings go up and down completely randomly.
Pair Corralation between Advtech and Trellidor Holdings
Assuming the 90 days trading horizon Advtech is expected to generate 0.36 times more return on investment than Trellidor Holdings. However, Advtech is 2.74 times less risky than Trellidor Holdings. It trades about 0.13 of its potential returns per unit of risk. Trellidor Holdings is currently generating about -0.19 per unit of risk. If you would invest 322,500 in Advtech on September 12, 2024 and sell it today you would earn a total of 10,100 from holding Advtech or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Advtech vs. Trellidor Holdings
Performance |
| Timeline |
| Advtech |
| Trellidor Holdings |
Advtech and Trellidor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advtech and Trellidor Holdings
The main advantage of trading using opposite Advtech and Trellidor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advtech position performs unexpectedly, Trellidor Holdings 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 Trellidor Holdings will offset losses from the drop in Trellidor Holdings' long position.| Advtech vs. Deneb Investments | Advtech vs. Hosken Consolidated Investments | Advtech vs. Astral Foods | Advtech vs. MC Mining |
| Trellidor Holdings vs. Brimstone Investment | Trellidor Holdings vs. Safari Investments RSA | Trellidor Holdings vs. Deneb Investments | Trellidor Holdings vs. Kumba Iron Ore |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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