Correlation Between Huntsman Exploration and Asia Broadband
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration and Asia Broadband 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 Huntsman Exploration and Asia Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and Asia Broadband, you can compare the effects of market volatilities on Huntsman Exploration and Asia Broadband 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 Huntsman Exploration with a short position of Asia Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and Asia Broadband.
Diversification Opportunities for Huntsman Exploration and Asia Broadband
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Huntsman and Asia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and Asia Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Broadband and Huntsman Exploration 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 Huntsman Exploration are associated (or correlated) with Asia Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Broadband has no effect on the direction of Huntsman Exploration i.e., Huntsman Exploration and Asia Broadband go up and down completely randomly.
Pair Corralation between Huntsman Exploration and Asia Broadband
Assuming the 90 days horizon Huntsman Exploration is expected to generate 6.45 times more return on investment than Asia Broadband. However, Huntsman Exploration is 6.45 times more volatile than Asia Broadband. It trades about 0.06 of its potential returns per unit of risk. Asia Broadband is currently generating about 0.04 per unit of risk. If you would invest 2.00 in Huntsman Exploration on September 14, 2024 and sell it today you would earn a total of 0.40 from holding Huntsman Exploration or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Huntsman Exploration vs. Asia Broadband
Performance |
| Timeline |
| Huntsman Exploration |
| Asia Broadband |
Huntsman Exploration and Asia Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and Asia Broadband
The main advantage of trading using opposite Huntsman Exploration and Asia Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration position performs unexpectedly, Asia Broadband 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 Asia Broadband will offset losses from the drop in Asia Broadband's long position.| Huntsman Exploration vs. Qubec Nickel Corp | Huntsman Exploration vs. IGO Limited | Huntsman Exploration vs. Focus Graphite | Huntsman Exploration vs. Mineral Res |
| Asia Broadband vs. Fury Gold Mines | Asia Broadband vs. Lion Copper and | Asia Broadband vs. Trilogy Metals | Asia Broadband vs. Western Copper and |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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