Correlation Between Arcontech Group and Asiamet Resources
Can any of the company-specific risk be diversified away by investing in both Arcontech Group and Asiamet Resources 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 Arcontech Group and Asiamet Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcontech Group Plc and Asiamet Resources Limited, you can compare the effects of market volatilities on Arcontech Group and Asiamet Resources 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 Arcontech Group with a short position of Asiamet Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcontech Group and Asiamet Resources.
Diversification Opportunities for Arcontech Group and Asiamet Resources
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arcontech and Asiamet is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Arcontech Group Plc and Asiamet Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiamet Resources and Arcontech Group 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 Arcontech Group Plc are associated (or correlated) with Asiamet Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiamet Resources has no effect on the direction of Arcontech Group i.e., Arcontech Group and Asiamet Resources go up and down completely randomly.
Pair Corralation between Arcontech Group and Asiamet Resources
Assuming the 90 days trading horizon Arcontech Group Plc is expected to generate 0.53 times more return on investment than Asiamet Resources. However, Arcontech Group Plc is 1.9 times less risky than Asiamet Resources. It trades about 0.06 of its potential returns per unit of risk. Asiamet Resources Limited is currently generating about -0.01 per unit of risk. If you would invest 6,684 in Arcontech Group Plc on November 2, 2024 and sell it today you would earn a total of 4,466 from holding Arcontech Group Plc or generate 66.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcontech Group Plc vs. Asiamet Resources Limited
Performance |
| Timeline |
| Arcontech Group Plc |
| Asiamet Resources |
Arcontech Group and Asiamet Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcontech Group and Asiamet Resources
The main advantage of trading using opposite Arcontech Group and Asiamet Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcontech Group position performs unexpectedly, Asiamet Resources 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 Asiamet Resources will offset losses from the drop in Asiamet Resources' long position.| Arcontech Group vs. Mineral Financial Investments | Arcontech Group vs. Mobius Investment Trust | Arcontech Group vs. One Media iP | Arcontech Group vs. LBG Media PLC |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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