Correlation Between Hanison Construction and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both Hanison Construction and AAC TECHNOLOGHLDGADR 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 Hanison Construction and AAC TECHNOLOGHLDGADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanison Construction Holdings and AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on Hanison Construction and AAC TECHNOLOGHLDGADR 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 Hanison Construction with a short position of AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for Hanison Construction and AAC TECHNOLOGHLDGADR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanison and AAC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanison Construction Holdings and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and Hanison Construction 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 Hanison Construction Holdings are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Hanison Construction i.e., Hanison Construction and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between Hanison Construction and AAC TECHNOLOGHLDGADR
Assuming the 90 days trading horizon Hanison Construction is expected to generate 1.45 times less return on investment than AAC TECHNOLOGHLDGADR. But when comparing it to its historical volatility, Hanison Construction Holdings is 1.41 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.05 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 239.00 in AAC TECHNOLOGHLDGADR on October 16, 2024 and sell it today you would earn a total of 193.00 from holding AAC TECHNOLOGHLDGADR or generate 80.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanison Construction Holdings vs. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| Hanison Construction |
| AAC TECHNOLOGHLDGADR |
Hanison Construction and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanison Construction and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite Hanison Construction and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanison Construction position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| Hanison Construction vs. PARKEN Sport Entertainment | Hanison Construction vs. Citic Telecom International | Hanison Construction vs. Fuji Media Holdings | Hanison Construction vs. Iridium Communications |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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