Correlation Between ADTRAN and Longduoduo Company
Can any of the company-specific risk be diversified away by investing in both ADTRAN and Longduoduo Company 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 ADTRAN and Longduoduo Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADTRAN Inc and Longduoduo Company Limited, you can compare the effects of market volatilities on ADTRAN and Longduoduo Company 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 ADTRAN with a short position of Longduoduo Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADTRAN and Longduoduo Company.
Diversification Opportunities for ADTRAN and Longduoduo Company
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADTRAN and Longduoduo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ADTRAN Inc and Longduoduo Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longduoduo Limited and ADTRAN 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 ADTRAN Inc are associated (or correlated) with Longduoduo Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longduoduo Limited has no effect on the direction of ADTRAN i.e., ADTRAN and Longduoduo Company go up and down completely randomly.
Pair Corralation between ADTRAN and Longduoduo Company
Given the investment horizon of 90 days ADTRAN Inc is expected to generate 0.32 times more return on investment than Longduoduo Company. However, ADTRAN Inc is 3.17 times less risky than Longduoduo Company. It trades about 0.19 of its potential returns per unit of risk. Longduoduo Company Limited is currently generating about 0.05 per unit of risk. If you would invest 595.00 in ADTRAN Inc on November 1, 2024 and sell it today you would earn a total of 368.00 from holding ADTRAN Inc or generate 61.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADTRAN Inc vs. Longduoduo Company Limited
Performance |
| Timeline |
| ADTRAN Inc |
| Longduoduo Limited |
ADTRAN and Longduoduo Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADTRAN and Longduoduo Company
The main advantage of trading using opposite ADTRAN and Longduoduo Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADTRAN position performs unexpectedly, Longduoduo Company 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 Longduoduo Company will offset losses from the drop in Longduoduo Company's long position.| ADTRAN vs. Mynaric AG ADR | ADTRAN vs. KVH Industries | ADTRAN vs. Telesat Corp | ADTRAN vs. Digi International |
| Longduoduo Company vs. Biodesix | Longduoduo Company vs. Neuronetics | Longduoduo Company vs. ENDRA Life Sciences | Longduoduo Company vs. Fonar |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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