Correlation Between A10 Network and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both A10 Network and Cheniere Energy 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 A10 Network and Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A10 Network and Cheniere Energy, you can compare the effects of market volatilities on A10 Network and Cheniere Energy 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 A10 Network with a short position of Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and Cheniere Energy.
Diversification Opportunities for A10 Network and Cheniere Energy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between A10 and Cheniere is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network and Cheniere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy and A10 Network 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 A10 Network are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy has no effect on the direction of A10 Network i.e., A10 Network and Cheniere Energy go up and down completely randomly.
Pair Corralation between A10 Network and Cheniere Energy
Given the investment horizon of 90 days A10 Network is expected to generate 0.72 times more return on investment than Cheniere Energy. However, A10 Network is 1.39 times less risky than Cheniere Energy. It trades about 0.21 of its potential returns per unit of risk. Cheniere Energy is currently generating about 0.05 per unit of risk. If you would invest 1,810 in A10 Network on December 2, 2024 and sell it today you would earn a total of 269.00 from holding A10 Network or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
A10 Network vs. Cheniere Energy
Performance |
| Timeline |
| A10 Network |
| Cheniere Energy |
A10 Network and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A10 Network and Cheniere Energy
The main advantage of trading using opposite A10 Network and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| A10 Network vs. Evertec | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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