Correlation Between Avanceon and Grays Leasing
Can any of the company-specific risk be diversified away by investing in both Avanceon and Grays Leasing 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 Avanceon and Grays Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanceon and Grays Leasing, you can compare the effects of market volatilities on Avanceon and Grays Leasing 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 Avanceon with a short position of Grays Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanceon and Grays Leasing.
Diversification Opportunities for Avanceon and Grays Leasing
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avanceon and Grays is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Avanceon and Grays Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grays Leasing and Avanceon 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 Avanceon are associated (or correlated) with Grays Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grays Leasing has no effect on the direction of Avanceon i.e., Avanceon and Grays Leasing go up and down completely randomly.
Pair Corralation between Avanceon and Grays Leasing
Assuming the 90 days trading horizon Avanceon is expected to under-perform the Grays Leasing. But the stock apears to be less risky and, when comparing its historical volatility, Avanceon is 1.5 times less risky than Grays Leasing. The stock trades about -0.12 of its potential returns per unit of risk. The Grays Leasing is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 530.00 in Grays Leasing on August 26, 2024 and sell it today you would lose (59.00) from holding Grays Leasing or give up 11.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.77% |
| Values | Daily Returns |
Avanceon vs. Grays Leasing
Performance |
| Timeline |
| Avanceon |
| Grays Leasing |
Avanceon and Grays Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanceon and Grays Leasing
The main advantage of trading using opposite Avanceon and Grays Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanceon position performs unexpectedly, Grays Leasing 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 Grays Leasing will offset losses from the drop in Grays Leasing's long position.| Avanceon vs. Pakistan State Oil | Avanceon vs. K Electric | Avanceon vs. Oil and Gas | Avanceon vs. Lucky Cement |
| Grays Leasing vs. Masood Textile Mills | Grays Leasing vs. Fauji Foods | Grays Leasing vs. KSB Pumps | Grays Leasing vs. Mari Petroleum |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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