Correlation Between Coda Octopus and AviChina Industry
Can any of the company-specific risk be diversified away by investing in both Coda Octopus and AviChina Industry 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 Coda Octopus and AviChina Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coda Octopus Group and AviChina Industry Technology, you can compare the effects of market volatilities on Coda Octopus and AviChina Industry 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 Coda Octopus with a short position of AviChina Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coda Octopus and AviChina Industry.
Diversification Opportunities for Coda Octopus and AviChina Industry
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coda and AviChina is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and AviChina Industry Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AviChina Industry and Coda Octopus 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 Coda Octopus Group are associated (or correlated) with AviChina Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AviChina Industry has no effect on the direction of Coda Octopus i.e., Coda Octopus and AviChina Industry go up and down completely randomly.
Pair Corralation between Coda Octopus and AviChina Industry
Given the investment horizon of 90 days Coda Octopus Group is expected to generate 1.17 times more return on investment than AviChina Industry. However, Coda Octopus is 1.17 times more volatile than AviChina Industry Technology. It trades about 0.03 of its potential returns per unit of risk. AviChina Industry Technology is currently generating about 0.03 per unit of risk. If you would invest 695.00 in Coda Octopus Group on September 14, 2024 and sell it today you would earn a total of 180.00 from holding Coda Octopus Group or generate 25.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Coda Octopus Group vs. AviChina Industry Technology
Performance |
| Timeline |
| Coda Octopus Group |
| AviChina Industry |
Coda Octopus and AviChina Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coda Octopus and AviChina Industry
The main advantage of trading using opposite Coda Octopus and AviChina Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus position performs unexpectedly, AviChina Industry 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 AviChina Industry will offset losses from the drop in AviChina Industry's long position.| Coda Octopus vs. Ducommun Incorporated | Coda Octopus vs. Park Electrochemical | Coda Octopus vs. National Presto Industries | Coda Octopus vs. Astronics |
| AviChina Industry vs. CTS Corporation | AviChina Industry vs. NETGEAR | AviChina Industry vs. Coda Octopus Group | AviChina Industry vs. Radcom |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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