Correlation Between Akora Resources and Steamships Trading
Can any of the company-specific risk be diversified away by investing in both Akora Resources and Steamships Trading 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 Akora Resources and Steamships Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akora Resources and Steamships Trading, you can compare the effects of market volatilities on Akora Resources and Steamships Trading 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 Akora Resources with a short position of Steamships Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akora Resources and Steamships Trading.
Diversification Opportunities for Akora Resources and Steamships Trading
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akora and Steamships is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Akora Resources and Steamships Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steamships Trading and Akora 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 Akora Resources are associated (or correlated) with Steamships Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steamships Trading has no effect on the direction of Akora Resources i.e., Akora Resources and Steamships Trading go up and down completely randomly.
Pair Corralation between Akora Resources and Steamships Trading
Assuming the 90 days trading horizon Akora Resources is expected to generate 15.97 times more return on investment than Steamships Trading. However, Akora Resources is 15.97 times more volatile than Steamships Trading. It trades about 0.08 of its potential returns per unit of risk. Steamships Trading is currently generating about -0.02 per unit of risk. If you would invest 9.10 in Akora Resources on September 12, 2024 and sell it today you would earn a total of 1.90 from holding Akora Resources or generate 20.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akora Resources vs. Steamships Trading
Performance |
| Timeline |
| Akora Resources |
| Steamships Trading |
Akora Resources and Steamships Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akora Resources and Steamships Trading
The main advantage of trading using opposite Akora Resources and Steamships Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akora Resources position performs unexpectedly, Steamships Trading 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 Steamships Trading will offset losses from the drop in Steamships Trading's long position.| Akora Resources vs. EMvision Medical Devices | Akora Resources vs. Data3 | Akora Resources vs. Autosports Group | Akora Resources vs. Flagship Investments |
| Steamships Trading vs. Red Hill Iron | Steamships Trading vs. K2 Asset Management | Steamships Trading vs. Cleanaway Waste Management | Steamships Trading vs. Hawsons Iron |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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