Correlation Between Accent and Advanced Braking
Can any of the company-specific risk be diversified away by investing in both Accent 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 Accent and Advanced Braking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accent Group and Advanced Braking Technology, you can compare the effects of market volatilities on Accent 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 Accent with a short position of Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accent and Advanced Braking.
Diversification Opportunities for Accent and Advanced Braking
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Accent and Advanced is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Accent Group 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 Accent 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 Accent Group 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 Accent i.e., Accent and Advanced Braking go up and down completely randomly.
Pair Corralation between Accent and Advanced Braking
Assuming the 90 days trading horizon Accent Group is expected to generate 0.99 times more return on investment than Advanced Braking. However, Accent Group is 1.01 times less risky than Advanced Braking. It trades about 0.16 of its potential returns per unit of risk. Advanced Braking Technology is currently generating about 0.05 per unit of risk. If you would invest 231.00 in Accent Group on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Accent Group or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accent Group vs. Advanced Braking Technology
Performance |
| Timeline |
| Accent Group |
| Advanced Braking Tec |
Accent and Advanced Braking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accent and Advanced Braking
The main advantage of trading using opposite Accent and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accent 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.| Accent vs. Macquarie Technology Group | Accent vs. Bailador Technology Invest | Accent vs. TPG Telecom | Accent vs. Alto Metals |
| Advanced Braking vs. Aneka Tambang Tbk | Advanced Braking vs. Commonwealth Bank | Advanced Braking vs. Commonwealth Bank of | Advanced Braking vs. Australia and New |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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