Correlation Between Alfa Financial and Oxford Technology
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Oxford 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 Alfa Financial and Oxford Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Oxford Technology 2, you can compare the effects of market volatilities on Alfa Financial and Oxford 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 Alfa Financial with a short position of Oxford Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Oxford Technology.
Diversification Opportunities for Alfa Financial and Oxford Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alfa and Oxford is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Oxford Technology 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Technology and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with Oxford Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Technology has no effect on the direction of Alfa Financial i.e., Alfa Financial and Oxford Technology go up and down completely randomly.
Pair Corralation between Alfa Financial and Oxford Technology
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 0.75 times more return on investment than Oxford Technology. However, Alfa Financial Software is 1.33 times less risky than Oxford Technology. It trades about 0.09 of its potential returns per unit of risk. Oxford Technology 2 is currently generating about -0.21 per unit of risk. If you would invest 21,700 in Alfa Financial Software on November 3, 2024 and sell it today you would earn a total of 650.00 from holding Alfa Financial Software or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Oxford Technology 2
Performance |
| Timeline |
| Alfa Financial Software |
| Oxford Technology |
Alfa Financial and Oxford Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Oxford Technology
The main advantage of trading using opposite Alfa Financial and Oxford Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Oxford 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 Oxford Technology will offset losses from the drop in Oxford Technology's long position.| Alfa Financial vs. Check Point Software | Alfa Financial vs. Europa Metals | Alfa Financial vs. National Beverage Corp | Alfa Financial vs. CNH Industrial NV |
| Oxford Technology vs. Samsung Electronics Co | Oxford Technology vs. Samsung Electronics Co | Oxford Technology vs. Toyota Motor Corp | Oxford Technology vs. SoftBank Group Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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