Correlation Between Excite Technology and Harvest Technology
Can any of the company-specific risk be diversified away by investing in both Excite Technology and Harvest Technology 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 Excite Technology and Harvest Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excite Technology Services and Harvest Technology Group, you can compare the effects of market volatilities on Excite Technology and Harvest Technology 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 Excite Technology with a short position of Harvest Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excite Technology and Harvest Technology.
Diversification Opportunities for Excite Technology and Harvest Technology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Excite and Harvest is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Excite Technology Services and Harvest Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Technology and Excite Technology 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 Excite Technology Services are associated (or correlated) with Harvest Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Technology has no effect on the direction of Excite Technology i.e., Excite Technology and Harvest Technology go up and down completely randomly.
Pair Corralation between Excite Technology and Harvest Technology
Assuming the 90 days trading horizon Excite Technology Services is expected to under-perform the Harvest Technology. But the stock apears to be less risky and, when comparing its historical volatility, Excite Technology Services is 1.54 times less risky than Harvest Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Harvest Technology Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1.40 in Harvest Technology Group on August 29, 2024 and sell it today you would earn a total of 0.90 from holding Harvest Technology Group or generate 64.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Excite Technology Services vs. Harvest Technology Group
Performance |
| Timeline |
| Excite Technology |
| Harvest Technology |
Excite Technology and Harvest Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excite Technology and Harvest Technology
The main advantage of trading using opposite Excite Technology and Harvest Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excite Technology position performs unexpectedly, Harvest Technology 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 Harvest Technology will offset losses from the drop in Harvest Technology's long position.| Excite Technology vs. PVW Resources | Excite Technology vs. Woolworths | Excite Technology vs. Wesfarmers | Excite Technology vs. Coles Group |
| Harvest Technology vs. PVW Resources | Harvest Technology vs. Woolworths | Harvest Technology vs. Wesfarmers | Harvest Technology vs. Coles Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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