Correlation Between Advanced Info and Access Power
Can any of the company-specific risk be diversified away by investing in both Advanced Info and Access Power 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 Advanced Info and Access Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Info Service and Access Power Co, you can compare the effects of market volatilities on Advanced Info and Access Power 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 Advanced Info with a short position of Access Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Info and Access Power.
Diversification Opportunities for Advanced Info and Access Power
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advanced and Access is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Access Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Power and Advanced Info 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 Advanced Info Service are associated (or correlated) with Access Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Power has no effect on the direction of Advanced Info i.e., Advanced Info and Access Power go up and down completely randomly.
Pair Corralation between Advanced Info and Access Power
Assuming the 90 days horizon Advanced Info is expected to generate 13.98 times less return on investment than Access Power. But when comparing it to its historical volatility, Advanced Info Service is 8.07 times less risky than Access Power. It trades about 0.06 of its potential returns per unit of risk. Access Power Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Access Power Co on August 24, 2024 and sell it today you would lose (0.02) from holding Access Power Co or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.4% |
| Values | Daily Returns |
Advanced Info Service vs. Access Power Co
Performance |
| Timeline |
| Advanced Info Service |
| Access Power |
Advanced Info and Access Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Info and Access Power
The main advantage of trading using opposite Advanced Info and Access Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info position performs unexpectedly, Access Power 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 Access Power will offset losses from the drop in Access Power's long position.| Advanced Info vs. Vodafone Group PLC | Advanced Info vs. KDDI Corp | Advanced Info vs. Amrica Mvil, SAB | Advanced Info vs. Singapore Telecommunications Limited |
| Access Power vs. BCE Inc | Access Power vs. Axiologix | Access Power vs. Advanced Info Service | Access Power vs. American Nortel Communications |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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