Correlation Between AMTD Digital and Appswarm
Can any of the company-specific risk be diversified away by investing in both AMTD Digital and Appswarm 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 AMTD Digital and Appswarm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMTD Digital and Appswarm, you can compare the effects of market volatilities on AMTD Digital and Appswarm 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 AMTD Digital with a short position of Appswarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMTD Digital and Appswarm.
Diversification Opportunities for AMTD Digital and Appswarm
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMTD and Appswarm is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AMTD Digital and Appswarm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appswarm and AMTD Digital 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 AMTD Digital are associated (or correlated) with Appswarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appswarm has no effect on the direction of AMTD Digital i.e., AMTD Digital and Appswarm go up and down completely randomly.
Pair Corralation between AMTD Digital and Appswarm
Considering the 90-day investment horizon AMTD Digital is expected to generate 0.52 times more return on investment than Appswarm. However, AMTD Digital is 1.91 times less risky than Appswarm. It trades about -0.18 of its potential returns per unit of risk. Appswarm is currently generating about -0.21 per unit of risk. If you would invest 346.00 in AMTD Digital on August 28, 2024 and sell it today you would lose (53.00) from holding AMTD Digital or give up 15.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMTD Digital vs. Appswarm
Performance |
| Timeline |
| AMTD Digital |
| Appswarm |
AMTD Digital and Appswarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMTD Digital and Appswarm
The main advantage of trading using opposite AMTD Digital and Appswarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMTD Digital position performs unexpectedly, Appswarm 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 Appswarm will offset losses from the drop in Appswarm's long position.The idea behind AMTD Digital and Appswarm pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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