Correlation Between Austchina Holdings and Advanced Braking
Can any of the company-specific risk be diversified away by investing in both Austchina Holdings and Advanced Braking 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 Austchina Holdings and Advanced Braking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austchina Holdings and Advanced Braking Technology, you can compare the effects of market volatilities on Austchina Holdings and Advanced Braking 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 Austchina Holdings with a short position of Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austchina Holdings and Advanced Braking.
Diversification Opportunities for Austchina Holdings and Advanced Braking
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Austchina and Advanced is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Austchina Holdings and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec and Austchina Holdings 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 Austchina Holdings are associated (or correlated) with Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Austchina Holdings i.e., Austchina Holdings and Advanced Braking go up and down completely randomly.
Pair Corralation between Austchina Holdings and Advanced Braking
Assuming the 90 days trading horizon Austchina Holdings is expected to generate 1.26 times less return on investment than Advanced Braking. In addition to that, Austchina Holdings is 3.6 times more volatile than Advanced Braking Technology. It trades about 0.01 of its total potential returns per unit of risk. Advanced Braking Technology is currently generating about 0.06 per unit of volatility. If you would invest 4.40 in Advanced Braking Technology on August 30, 2024 and sell it today you would earn a total of 4.50 from holding Advanced Braking Technology or generate 102.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austchina Holdings vs. Advanced Braking Technology
Performance |
| Timeline |
| Austchina Holdings |
| Advanced Braking Tec |
Austchina Holdings and Advanced Braking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austchina Holdings and Advanced Braking
The main advantage of trading using opposite Austchina Holdings and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austchina Holdings position performs unexpectedly, Advanced Braking 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 Advanced Braking will offset losses from the drop in Advanced Braking's long position.| Austchina Holdings vs. Advanced Braking Technology | Austchina Holdings vs. Phoslock Environmental Technologies | Austchina Holdings vs. Perseus Mining | Austchina Holdings vs. Bisalloy Steel Group |
| Advanced Braking vs. Summit Resources Limited | Advanced Braking vs. Champion Iron | Advanced Braking vs. Ridley | Advanced Braking vs. Peel Mining |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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