Correlation Between Automotive Stampings and IdeaForge Technology
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By analyzing existing cross correlation between Automotive Stampings and and ideaForge Technology Limited, you can compare the effects of market volatilities on Automotive Stampings and IdeaForge 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 Automotive Stampings with a short position of IdeaForge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automotive Stampings and IdeaForge Technology.
Diversification Opportunities for Automotive Stampings and IdeaForge Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Automotive and IdeaForge is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Stampings and and ideaForge Technology Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ideaForge Technology and Automotive Stampings 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 Automotive Stampings and are associated (or correlated) with IdeaForge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ideaForge Technology has no effect on the direction of Automotive Stampings i.e., Automotive Stampings and IdeaForge Technology go up and down completely randomly.
Pair Corralation between Automotive Stampings and IdeaForge Technology
Assuming the 90 days trading horizon Automotive Stampings and is expected to generate 1.32 times more return on investment than IdeaForge Technology. However, Automotive Stampings is 1.32 times more volatile than ideaForge Technology Limited. It trades about 0.05 of its potential returns per unit of risk. ideaForge Technology Limited is currently generating about -0.08 per unit of risk. If you would invest 33,005 in Automotive Stampings and on October 27, 2024 and sell it today you would earn a total of 28,720 from holding Automotive Stampings and or generate 87.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.85% |
| Values | Daily Returns |
Automotive Stampings and vs. ideaForge Technology Limited
Performance |
| Timeline |
| Automotive Stampings and |
| ideaForge Technology |
Automotive Stampings and IdeaForge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automotive Stampings and IdeaForge Technology
The main advantage of trading using opposite Automotive Stampings and IdeaForge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automotive Stampings position performs unexpectedly, IdeaForge 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 IdeaForge Technology will offset losses from the drop in IdeaForge Technology's long position.The idea behind Automotive Stampings and and ideaForge Technology Limited 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.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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