Correlation Between Affiliated Resources and Sanrio Company
Can any of the company-specific risk be diversified away by investing in both Affiliated Resources and Sanrio 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 Affiliated Resources and Sanrio Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Resources Corp and Sanrio Company, you can compare the effects of market volatilities on Affiliated Resources and Sanrio 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 Affiliated Resources with a short position of Sanrio Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and Sanrio Company.
Diversification Opportunities for Affiliated Resources and Sanrio Company
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Affiliated and Sanrio is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and Sanrio Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanrio Company and Affiliated Resources 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 Affiliated Resources Corp are associated (or correlated) with Sanrio Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanrio Company has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Sanrio Company go up and down completely randomly.
Pair Corralation between Affiliated Resources and Sanrio Company
Given the investment horizon of 90 days Affiliated Resources Corp is expected to under-perform the Sanrio Company. In addition to that, Affiliated Resources is 1.22 times more volatile than Sanrio Company. It trades about -0.08 of its total potential returns per unit of risk. Sanrio Company is currently generating about 0.19 per unit of volatility. If you would invest 2,675 in Sanrio Company on August 30, 2024 and sell it today you would earn a total of 375.00 from holding Sanrio Company or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Resources Corp vs. Sanrio Company
Performance |
| Timeline |
| Affiliated Resources Corp |
| Sanrio Company |
Affiliated Resources and Sanrio Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Resources and Sanrio Company
The main advantage of trading using opposite Affiliated Resources and Sanrio Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Resources position performs unexpectedly, Sanrio 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 Sanrio Company will offset losses from the drop in Sanrio Company's long position.| Affiliated Resources vs. Allison Transmission Holdings | Affiliated Resources vs. Luminar Technologies | Affiliated Resources vs. Lear Corporation | Affiliated Resources vs. BorgWarner |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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