Correlation Between Auction Technology and Pressure Technologies
Can any of the company-specific risk be diversified away by investing in both Auction Technology and Pressure Technologies 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 Pressure Technologies 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 Pressure Technologies Plc, you can compare the effects of market volatilities on Auction Technology and Pressure Technologies 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 Pressure Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Pressure Technologies.
Diversification Opportunities for Auction Technology and Pressure Technologies
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auction and Pressure is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Pressure Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pressure Technologies Plc 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 Pressure Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pressure Technologies Plc has no effect on the direction of Auction Technology i.e., Auction Technology and Pressure Technologies go up and down completely randomly.
Pair Corralation between Auction Technology and Pressure Technologies
Assuming the 90 days trading horizon Auction Technology is expected to generate 2.26 times less return on investment than Pressure Technologies. In addition to that, Auction Technology is 1.07 times more volatile than Pressure Technologies Plc. It trades about 0.0 of its total potential returns per unit of risk. Pressure Technologies Plc is currently generating about 0.01 per unit of volatility. If you would invest 4,100 in Pressure Technologies Plc on November 1, 2024 and sell it today you would lose (250.00) from holding Pressure Technologies Plc or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.39% |
| Values | Daily Returns |
Auction Technology Group vs. Pressure Technologies Plc
Performance |
| Timeline |
| Auction Technology |
| Pressure Technologies Plc |
Auction Technology and Pressure Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Pressure Technologies
The main advantage of trading using opposite Auction Technology and Pressure Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, Pressure Technologies 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 Pressure Technologies will offset losses from the drop in Pressure Technologies' long position.| Auction Technology vs. Delta Air Lines | Auction Technology vs. JLEN Environmental Assets | Auction Technology vs. Waste Management | Auction Technology vs. Ryanair Holdings plc |
| Pressure Technologies vs. Advanced Medical Solutions | Pressure Technologies vs. URU Metals | Pressure Technologies vs. Beowulf Mining | Pressure Technologies vs. bet at home AG |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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