Correlation Between EROAD and Actinogen Medical
Can any of the company-specific risk be diversified away by investing in both EROAD and Actinogen Medical 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 EROAD and Actinogen Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EROAD and Actinogen Medical, you can compare the effects of market volatilities on EROAD and Actinogen Medical 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 EROAD with a short position of Actinogen Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EROAD and Actinogen Medical.
Diversification Opportunities for EROAD and Actinogen Medical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EROAD and Actinogen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding EROAD and Actinogen Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actinogen Medical and EROAD 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 EROAD are associated (or correlated) with Actinogen Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actinogen Medical has no effect on the direction of EROAD i.e., EROAD and Actinogen Medical go up and down completely randomly.
Pair Corralation between EROAD and Actinogen Medical
Assuming the 90 days trading horizon EROAD is expected to under-perform the Actinogen Medical. But the stock apears to be less risky and, when comparing its historical volatility, EROAD is 3.38 times less risky than Actinogen Medical. The stock trades about 0.0 of its potential returns per unit of risk. The Actinogen Medical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.70 in Actinogen Medical on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Actinogen Medical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EROAD vs. Actinogen Medical
Performance |
| Timeline |
| EROAD |
| Actinogen Medical |
EROAD and Actinogen Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EROAD and Actinogen Medical
The main advantage of trading using opposite EROAD and Actinogen Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EROAD position performs unexpectedly, Actinogen Medical 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 Actinogen Medical will offset losses from the drop in Actinogen Medical's long position.| EROAD vs. Mayfield Childcare | EROAD vs. Ainsworth Game Technology | EROAD vs. Ras Technology Holdings | EROAD vs. Super Retail Group |
| Actinogen Medical vs. Aneka Tambang Tbk | Actinogen Medical vs. Commonwealth Bank | Actinogen Medical vs. Commonwealth Bank of | Actinogen Medical 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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