Correlation Between ABACUS STORAGE and Austchina Holdings
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Austchina Holdings 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 ABACUS STORAGE and Austchina Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Austchina Holdings, you can compare the effects of market volatilities on ABACUS STORAGE and Austchina Holdings 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 ABACUS STORAGE with a short position of Austchina Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Austchina Holdings.
Diversification Opportunities for ABACUS STORAGE and Austchina Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABACUS and Austchina is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Austchina Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austchina Holdings and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Austchina Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austchina Holdings has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Austchina Holdings go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Austchina Holdings
If you would invest 0.20 in Austchina Holdings on September 1, 2024 and sell it today you would lose (0.10) from holding Austchina Holdings or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Austchina Holdings
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Austchina Holdings |
ABACUS STORAGE and Austchina Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Austchina Holdings
The main advantage of trading using opposite ABACUS STORAGE and Austchina Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Austchina Holdings 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 Austchina Holdings will offset losses from the drop in Austchina Holdings' long position.| ABACUS STORAGE vs. Westpac Banking | ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Imricor Medical Systems | ABACUS STORAGE vs. Midway |
| Austchina Holdings vs. Westpac Banking | Austchina Holdings vs. ABACUS STORAGE KING | Austchina Holdings vs. Odyssey Energy | Austchina Holdings vs. Imricor Medical Systems |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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