Correlation Between Auction Technology and International Biotechnology
Can any of the company-specific risk be diversified away by investing in both Auction Technology and International Biotechnology 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 Auction Technology and International Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and International Biotechnology Trust, you can compare the effects of market volatilities on Auction Technology and International Biotechnology 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 Auction Technology with a short position of International Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and International Biotechnology.
Diversification Opportunities for Auction Technology and International Biotechnology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auction and International is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and International Biotechnology Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Biotechnology and Auction Technology 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 Auction Technology Group are associated (or correlated) with International Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Biotechnology has no effect on the direction of Auction Technology i.e., Auction Technology and International Biotechnology go up and down completely randomly.
Pair Corralation between Auction Technology and International Biotechnology
Assuming the 90 days trading horizon Auction Technology Group is expected to under-perform the International Biotechnology. In addition to that, Auction Technology is 1.59 times more volatile than International Biotechnology Trust. It trades about -0.05 of its total potential returns per unit of risk. International Biotechnology Trust is currently generating about 0.03 per unit of volatility. If you would invest 68,800 in International Biotechnology Trust on August 28, 2024 and sell it today you would earn a total of 600.00 from holding International Biotechnology Trust or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. International Biotechnology Tr
Performance |
| Timeline |
| Auction Technology |
| International Biotechnology |
Auction Technology and International Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and International Biotechnology
The main advantage of trading using opposite Auction Technology and International Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, International Biotechnology 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 International Biotechnology will offset losses from the drop in International Biotechnology's long position.| Auction Technology vs. Uniper SE | Auction Technology vs. London Security Plc | Auction Technology vs. SURETRACK MON | Auction Technology vs. Ikigai Ventures |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |