Correlation Between AKD Hospitality and Avanceon
Can any of the company-specific risk be diversified away by investing in both AKD Hospitality and Avanceon 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 AKD Hospitality and Avanceon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKD Hospitality and Avanceon, you can compare the effects of market volatilities on AKD Hospitality and Avanceon 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 AKD Hospitality with a short position of Avanceon. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKD Hospitality and Avanceon.
Diversification Opportunities for AKD Hospitality and Avanceon
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AKD and Avanceon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AKD Hospitality and Avanceon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanceon and AKD Hospitality 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 AKD Hospitality are associated (or correlated) with Avanceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanceon has no effect on the direction of AKD Hospitality i.e., AKD Hospitality and Avanceon go up and down completely randomly.
Pair Corralation between AKD Hospitality and Avanceon
Assuming the 90 days trading horizon AKD Hospitality is expected to under-perform the Avanceon. In addition to that, AKD Hospitality is 1.21 times more volatile than Avanceon. It trades about -0.02 of its total potential returns per unit of risk. Avanceon is currently generating about 0.04 per unit of volatility. If you would invest 5,232 in Avanceon on August 30, 2024 and sell it today you would earn a total of 79.00 from holding Avanceon or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AKD Hospitality vs. Avanceon
Performance |
| Timeline |
| AKD Hospitality |
| Avanceon |
AKD Hospitality and Avanceon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKD Hospitality and Avanceon
The main advantage of trading using opposite AKD Hospitality and Avanceon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKD Hospitality position performs unexpectedly, Avanceon 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 Avanceon will offset losses from the drop in Avanceon's long position.| AKD Hospitality vs. Crescent Steel Allied | AKD Hospitality vs. Reliance Insurance Co | AKD Hospitality vs. International Steels | AKD Hospitality vs. Bank of Punjab |
| Avanceon vs. Air Link Communication | Avanceon vs. Unity Foods | Avanceon vs. The Organic Meat | Avanceon vs. Dost Steels |
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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