Correlation Between AiMedia Technologies and Thorney Technologies
Can any of the company-specific risk be diversified away by investing in both AiMedia Technologies and Thorney Technologies 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 AiMedia Technologies and Thorney Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AiMedia Technologies and Thorney Technologies, you can compare the effects of market volatilities on AiMedia Technologies and Thorney Technologies 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 AiMedia Technologies with a short position of Thorney Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiMedia Technologies and Thorney Technologies.
Diversification Opportunities for AiMedia Technologies and Thorney Technologies
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AiMedia and Thorney is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Thorney Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thorney Technologies and AiMedia Technologies 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 AiMedia Technologies are associated (or correlated) with Thorney Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thorney Technologies has no effect on the direction of AiMedia Technologies i.e., AiMedia Technologies and Thorney Technologies go up and down completely randomly.
Pair Corralation between AiMedia Technologies and Thorney Technologies
Assuming the 90 days trading horizon AiMedia Technologies is expected to under-perform the Thorney Technologies. In addition to that, AiMedia Technologies is 1.55 times more volatile than Thorney Technologies. It trades about -0.1 of its total potential returns per unit of risk. Thorney Technologies is currently generating about -0.08 per unit of volatility. If you would invest 15.00 in Thorney Technologies on August 30, 2024 and sell it today you would lose (1.00) from holding Thorney Technologies or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AiMedia Technologies vs. Thorney Technologies
Performance |
| Timeline |
| AiMedia Technologies |
| Thorney Technologies |
AiMedia Technologies and Thorney Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AiMedia Technologies and Thorney Technologies
The main advantage of trading using opposite AiMedia Technologies and Thorney Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AiMedia Technologies position performs unexpectedly, Thorney Technologies 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 Thorney Technologies will offset losses from the drop in Thorney Technologies' long position.| AiMedia Technologies vs. PVW Resources | AiMedia Technologies vs. Woolworths | AiMedia Technologies vs. Wesfarmers | AiMedia Technologies vs. Coles Group |
| Thorney Technologies vs. ABACUS STORAGE KING | Thorney Technologies vs. Odyssey Energy | Thorney Technologies vs. Champion Iron | Thorney Technologies vs. Ridley |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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