Correlation Between Converge Information and First Abacus
Can any of the company-specific risk be diversified away by investing in both Converge Information and First Abacus 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 Converge Information and First Abacus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Information Communications and First Abacus Financial, you can compare the effects of market volatilities on Converge Information and First Abacus 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 Converge Information with a short position of First Abacus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and First Abacus.
Diversification Opportunities for Converge Information and First Abacus
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Converge and First is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and First Abacus Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Abacus Financial and Converge Information 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 Converge Information Communications are associated (or correlated) with First Abacus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Abacus Financial has no effect on the direction of Converge Information i.e., Converge Information and First Abacus go up and down completely randomly.
Pair Corralation between Converge Information and First Abacus
Assuming the 90 days trading horizon Converge Information Communications is expected to generate 0.62 times more return on investment than First Abacus. However, Converge Information Communications is 1.62 times less risky than First Abacus. It trades about 0.22 of its potential returns per unit of risk. First Abacus Financial is currently generating about -0.16 per unit of risk. If you would invest 1,592 in Converge Information Communications on October 20, 2024 and sell it today you would earn a total of 104.00 from holding Converge Information Communications or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.89% |
| Values | Daily Returns |
Converge Information Communica vs. First Abacus Financial
Performance |
| Timeline |
| Converge Information |
| First Abacus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Converge Information and First Abacus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Information and First Abacus
The main advantage of trading using opposite Converge Information and First Abacus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information position performs unexpectedly, First Abacus 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 First Abacus will offset losses from the drop in First Abacus' long position.| Converge Information vs. Atlas Consolidated Mining | Converge Information vs. Suntrust Home Developers | Converge Information vs. National Reinsurance | Converge Information vs. Lepanto Consolidated Mining |
| First Abacus vs. Apex Mining Co | First Abacus vs. Philex Mining Corp | First Abacus vs. Converge Information Communications | First Abacus vs. House of Investments |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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