Correlation Between American Nortel and Asia Global
Can any of the company-specific risk be diversified away by investing in both American Nortel and Asia Global 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 American Nortel and Asia Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Nortel Communications and Asia Global Crossing, you can compare the effects of market volatilities on American Nortel and Asia Global 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 American Nortel with a short position of Asia Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Nortel and Asia Global.
Diversification Opportunities for American Nortel and Asia Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Asia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Nortel Communications and Asia Global Crossing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Global Crossing and American Nortel 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 American Nortel Communications are associated (or correlated) with Asia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Global Crossing has no effect on the direction of American Nortel i.e., American Nortel and Asia Global go up and down completely randomly.
Pair Corralation between American Nortel and Asia Global
If you would invest 2.20 in American Nortel Communications on November 3, 2024 and sell it today you would earn a total of 0.52 from holding American Nortel Communications or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Nortel Communications vs. Asia Global Crossing
Performance |
| Timeline |
| American Nortel Comm |
| Asia Global Crossing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Nortel and Asia Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Nortel and Asia Global
The main advantage of trading using opposite American Nortel and Asia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Nortel position performs unexpectedly, Asia Global 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 Asia Global will offset losses from the drop in Asia Global's long position.The idea behind American Nortel Communications and Asia Global Crossing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Asia Global vs. BCE Inc | Asia Global vs. Advanced Info Service | Asia Global vs. American Nortel Communications | Asia Global vs. Axiologix |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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