Correlation Between Aeorema Communications and Made Tech
Can any of the company-specific risk be diversified away by investing in both Aeorema Communications and Made Tech 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 Aeorema Communications and Made Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeorema Communications Plc and Made Tech Group, you can compare the effects of market volatilities on Aeorema Communications and Made Tech 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 Aeorema Communications with a short position of Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeorema Communications and Made Tech.
Diversification Opportunities for Aeorema Communications and Made Tech
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aeorema and Made is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aeorema Communications Plc and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group and Aeorema Communications 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 Aeorema Communications Plc are associated (or correlated) with Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Aeorema Communications i.e., Aeorema Communications and Made Tech go up and down completely randomly.
Pair Corralation between Aeorema Communications and Made Tech
Assuming the 90 days trading horizon Aeorema Communications Plc is expected to under-perform the Made Tech. But the stock apears to be less risky and, when comparing its historical volatility, Aeorema Communications Plc is 2.42 times less risky than Made Tech. The stock trades about -0.06 of its potential returns per unit of risk. The Made Tech Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,775 in Made Tech Group on November 4, 2024 and sell it today you would earn a total of 1,000.00 from holding Made Tech Group or generate 56.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeorema Communications Plc vs. Made Tech Group
Performance |
| Timeline |
| Aeorema Communications |
| Made Tech Group |
Aeorema Communications and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeorema Communications and Made Tech
The main advantage of trading using opposite Aeorema Communications and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeorema Communications position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Aeorema Communications vs. Coeur Mining | Aeorema Communications vs. Fulcrum Metals PLC | Aeorema Communications vs. AMG Advanced Metallurgical | Aeorema Communications vs. Empire Metals Limited |
| Made Tech vs. Aptitude Software Group | Made Tech vs. Fair Oaks Income | Made Tech vs. British American Tobacco | Made Tech vs. Sealed Air Corp |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |