Correlation Between Albany International and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both Albany International and Lotus Technology 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 Albany International and Lotus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albany International and Lotus Technology Warrants, you can compare the effects of market volatilities on Albany International and Lotus Technology 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 Albany International with a short position of Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albany International and Lotus Technology.
Diversification Opportunities for Albany International and Lotus Technology
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Albany and Lotus is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Albany International and Lotus Technology Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology Warrants and Albany International 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 Albany International are associated (or correlated) with Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology Warrants has no effect on the direction of Albany International i.e., Albany International and Lotus Technology go up and down completely randomly.
Pair Corralation between Albany International and Lotus Technology
Considering the 90-day investment horizon Albany International is expected to under-perform the Lotus Technology. But the stock apears to be less risky and, when comparing its historical volatility, Albany International is 4.15 times less risky than Lotus Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Lotus Technology Warrants is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Lotus Technology Warrants on November 9, 2024 and sell it today you would earn a total of 1.00 from holding Lotus Technology Warrants or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Albany International vs. Lotus Technology Warrants
Performance |
| Timeline |
| Albany International |
| Lotus Technology Warrants |
Albany International and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albany International and Lotus Technology
The main advantage of trading using opposite Albany International and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albany International position performs unexpectedly, Lotus Technology 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 Lotus Technology will offset losses from the drop in Lotus Technology's long position.| Albany International vs. Culp Inc | Albany International vs. Unifi Inc | Albany International vs. Toray Industries |
| Lotus Technology vs. Ambipar Emergency Response | Lotus Technology vs. Weyco Group | Lotus Technology vs. MYT Netherlands Parent | Lotus Technology vs. Valneva SE ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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