Correlation Between Astar and Aces Electronics
Can any of the company-specific risk be diversified away by investing in both Astar and Aces Electronics 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 Astar and Aces Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Aces Electronics Co, you can compare the effects of market volatilities on Astar and Aces Electronics 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 Astar with a short position of Aces Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Aces Electronics.
Diversification Opportunities for Astar and Aces Electronics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astar and Aces is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Aces Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aces Electronics and Astar 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 Astar are associated (or correlated) with Aces Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aces Electronics has no effect on the direction of Astar i.e., Astar and Aces Electronics go up and down completely randomly.
Pair Corralation between Astar and Aces Electronics
Assuming the 90 days trading horizon Astar is expected to under-perform the Aces Electronics. In addition to that, Astar is 3.38 times more volatile than Aces Electronics Co. It trades about -0.18 of its total potential returns per unit of risk. Aces Electronics Co is currently generating about -0.32 per unit of volatility. If you would invest 5,350 in Aces Electronics Co on October 12, 2024 and sell it today you would lose (540.00) from holding Aces Electronics Co or give up 10.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astar vs. Aces Electronics Co
Performance |
| Timeline |
| Astar |
| Aces Electronics |
Astar and Aces Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Aces Electronics
The main advantage of trading using opposite Astar and Aces Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Aces Electronics 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 Aces Electronics will offset losses from the drop in Aces Electronics' long position.The idea behind Astar and Aces Electronics Co 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.| Aces Electronics vs. Chant Sincere Co | Aces Electronics vs. Altek Corp | Aces Electronics vs. Jentech Precision Industrial | Aces Electronics vs. Lotes Co |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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