Correlation Between AKD Hospitality and Beco Steel
Can any of the company-specific risk be diversified away by investing in both AKD Hospitality and Beco Steel 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 Beco Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKD Hospitality and Beco Steel, you can compare the effects of market volatilities on AKD Hospitality and Beco Steel 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 Beco Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKD Hospitality and Beco Steel.
Diversification Opportunities for AKD Hospitality and Beco Steel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AKD and Beco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AKD Hospitality and Beco Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beco Steel 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 Beco Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beco Steel has no effect on the direction of AKD Hospitality i.e., AKD Hospitality and Beco Steel go up and down completely randomly.
Pair Corralation between AKD Hospitality and Beco Steel
Assuming the 90 days trading horizon AKD Hospitality is expected to generate 1.22 times more return on investment than Beco Steel. However, AKD Hospitality is 1.22 times more volatile than Beco Steel. It trades about 0.03 of its potential returns per unit of risk. Beco Steel is currently generating about -0.02 per unit of risk. If you would invest 11,791 in AKD Hospitality on August 28, 2024 and sell it today you would earn a total of 2,209 from holding AKD Hospitality or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 68.54% |
| Values | Daily Returns |
AKD Hospitality vs. Beco Steel
Performance |
| Timeline |
| AKD Hospitality |
| Beco Steel |
AKD Hospitality and Beco Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKD Hospitality and Beco Steel
The main advantage of trading using opposite AKD Hospitality and Beco Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKD Hospitality position performs unexpectedly, Beco Steel 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 Beco Steel will offset losses from the drop in Beco Steel's long position.| AKD Hospitality vs. Habib Insurance | AKD Hospitality vs. Century Insurance | AKD Hospitality vs. Reliance Weaving Mills | AKD Hospitality vs. Media Times |
| Beco Steel vs. United Insurance | Beco Steel vs. JS Global Banking | Beco Steel vs. Escorts Investment Bank | Beco Steel vs. Askari Bank |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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