Correlation Between Avenir Telecom and Mauna Kea
Can any of the company-specific risk be diversified away by investing in both Avenir Telecom and Mauna Kea 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 Avenir Telecom and Mauna Kea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avenir Telecom SA and Mauna Kea Technologies, you can compare the effects of market volatilities on Avenir Telecom and Mauna Kea 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 Avenir Telecom with a short position of Mauna Kea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avenir Telecom and Mauna Kea.
Diversification Opportunities for Avenir Telecom and Mauna Kea
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avenir and Mauna is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Avenir Telecom SA and Mauna Kea Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mauna Kea Technologies and Avenir Telecom 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 Avenir Telecom SA are associated (or correlated) with Mauna Kea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mauna Kea Technologies has no effect on the direction of Avenir Telecom i.e., Avenir Telecom and Mauna Kea go up and down completely randomly.
Pair Corralation between Avenir Telecom and Mauna Kea
Assuming the 90 days trading horizon Avenir Telecom SA is expected to generate 0.42 times more return on investment than Mauna Kea. However, Avenir Telecom SA is 2.36 times less risky than Mauna Kea. It trades about -0.31 of its potential returns per unit of risk. Mauna Kea Technologies is currently generating about -0.34 per unit of risk. If you would invest 8.68 in Avenir Telecom SA on August 29, 2024 and sell it today you would lose (1.37) from holding Avenir Telecom SA or give up 15.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avenir Telecom SA vs. Mauna Kea Technologies
Performance |
| Timeline |
| Avenir Telecom SA |
| Mauna Kea Technologies |
Avenir Telecom and Mauna Kea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avenir Telecom and Mauna Kea
The main advantage of trading using opposite Avenir Telecom and Mauna Kea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avenir Telecom position performs unexpectedly, Mauna Kea 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 Mauna Kea will offset losses from the drop in Mauna Kea's long position.| Avenir Telecom vs. ATEME SA | Avenir Telecom vs. Grolleau SAS | Avenir Telecom vs. Entech SE SAS | Avenir Telecom vs. Haffner Energy SA |
| Mauna Kea vs. LVMH Mot Hennessy | Mauna Kea vs. LOreal SA | Mauna Kea vs. Hermes International SCA | Mauna Kea vs. Manitou BF SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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