Correlation Between Empire Global and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Empire Global and AKITA Drilling 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 Empire Global and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Global Gaming and AKITA Drilling, you can compare the effects of market volatilities on Empire Global and AKITA Drilling 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 Empire Global with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Global and AKITA Drilling.
Diversification Opportunities for Empire Global and AKITA Drilling
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Empire and AKITA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Empire Global 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 Empire Global Gaming are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Empire Global i.e., Empire Global and AKITA Drilling go up and down completely randomly.
Pair Corralation between Empire Global and AKITA Drilling
Given the investment horizon of 90 days Empire Global Gaming is expected to under-perform the AKITA Drilling. In addition to that, Empire Global is 3.22 times more volatile than AKITA Drilling. It trades about -0.07 of its total potential returns per unit of risk. AKITA Drilling is currently generating about 0.01 per unit of volatility. If you would invest 123.00 in AKITA Drilling on September 12, 2024 and sell it today you would lose (8.00) from holding AKITA Drilling or give up 6.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Global Gaming vs. AKITA Drilling
Performance |
| Timeline |
| Empire Global Gaming |
| AKITA Drilling |
Empire Global and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Global and AKITA Drilling
The main advantage of trading using opposite Empire Global and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Global position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Empire Global vs. Intema Solutions | Empire Global vs. Royal Wins | Empire Global vs. Real Luck Group | Empire Global vs. Betmakers Technology Group |
| AKITA Drilling vs. POSCO Holdings | AKITA Drilling vs. Schweizerische Nationalbank | AKITA Drilling vs. Berkshire Hathaway | AKITA Drilling vs. Berkshire Hathaway |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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