Correlation Between Advanced Info and Track
Can any of the company-specific risk be diversified away by investing in both Advanced Info and Track 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 Track 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 Track Group, you can compare the effects of market volatilities on Advanced Info and Track 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 Track. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Info and Track.
Diversification Opportunities for Advanced Info and Track
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Track is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Track Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Track Group 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 Track. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Track Group has no effect on the direction of Advanced Info i.e., Advanced Info and Track go up and down completely randomly.
Pair Corralation between Advanced Info and Track
Assuming the 90 days horizon Advanced Info is expected to generate 3.25 times less return on investment than Track. But when comparing it to its historical volatility, Advanced Info Service is 3.04 times less risky than Track. It trades about 0.07 of its potential returns per unit of risk. Track Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Track Group on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Track Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Info Service vs. Track Group
Performance |
| Timeline |
| Advanced Info Service |
| Track Group |
Advanced Info and Track Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Info and Track
The main advantage of trading using opposite Advanced Info and Track positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info position performs unexpectedly, Track 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 Track will offset losses from the drop in Track's long position.| Advanced Info vs. BCE Inc | Advanced Info vs. Axiologix | Advanced Info 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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