Correlation Between APT Satellite and Nippon Telegraph
Can any of the company-specific risk be diversified away by investing in both APT Satellite and Nippon Telegraph 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 APT Satellite and Nippon Telegraph into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APT Satellite Holdings and Nippon Telegraph Telephone, you can compare the effects of market volatilities on APT Satellite and Nippon Telegraph 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 APT Satellite with a short position of Nippon Telegraph. Check out your portfolio center. Please also check ongoing floating volatility patterns of APT Satellite and Nippon Telegraph.
Diversification Opportunities for APT Satellite and Nippon Telegraph
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between APT and Nippon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding APT Satellite Holdings and Nippon Telegraph Telephone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Telegraph Tel and APT Satellite 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 APT Satellite Holdings are associated (or correlated) with Nippon Telegraph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Telegraph Tel has no effect on the direction of APT Satellite i.e., APT Satellite and Nippon Telegraph go up and down completely randomly.
Pair Corralation between APT Satellite and Nippon Telegraph
If you would invest 93.00 in Nippon Telegraph Telephone on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Nippon Telegraph Telephone or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
APT Satellite Holdings vs. Nippon Telegraph Telephone
Performance |
| Timeline |
| APT Satellite Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nippon Telegraph Tel |
APT Satellite and Nippon Telegraph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APT Satellite and Nippon Telegraph
The main advantage of trading using opposite APT Satellite and Nippon Telegraph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APT Satellite position performs unexpectedly, Nippon Telegraph 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 Nippon Telegraph will offset losses from the drop in Nippon Telegraph's long position.| APT Satellite vs. Verizon Communications | APT Satellite vs. T Mobile | APT Satellite vs. Lumen Technologies | APT Satellite vs. Comcast Corp |
| Nippon Telegraph vs. Verizon Communications | Nippon Telegraph vs. ATT Inc | Nippon Telegraph vs. Pharvaris BV | Nippon Telegraph vs. Direxion Daily FTSE |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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