Correlation Between Allhome Corp and Converge Information
Can any of the company-specific risk be diversified away by investing in both Allhome Corp and Converge Information 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 Allhome Corp and Converge Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allhome Corp and Converge Information Communications, you can compare the effects of market volatilities on Allhome Corp and Converge Information 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 Allhome Corp with a short position of Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allhome Corp and Converge Information.
Diversification Opportunities for Allhome Corp and Converge Information
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allhome and Converge is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Allhome Corp and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information and Allhome Corp 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 Allhome Corp are associated (or correlated) with Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Allhome Corp i.e., Allhome Corp and Converge Information go up and down completely randomly.
Pair Corralation between Allhome Corp and Converge Information
Assuming the 90 days trading horizon Allhome Corp is expected to under-perform the Converge Information. In addition to that, Allhome Corp is 1.01 times more volatile than Converge Information Communications. It trades about -0.04 of its total potential returns per unit of risk. Converge Information Communications is currently generating about -0.03 per unit of volatility. If you would invest 1,694 in Converge Information Communications on August 29, 2024 and sell it today you would lose (34.00) from holding Converge Information Communications or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allhome Corp vs. Converge Information Communica
Performance |
| Timeline |
| Allhome Corp |
| Converge Information |
Allhome Corp and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allhome Corp and Converge Information
The main advantage of trading using opposite Allhome Corp and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allhome Corp position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.| Allhome Corp vs. Metropolitan Bank Trust | Allhome Corp vs. Asia United Bank | Allhome Corp vs. BDO Unibank | Allhome Corp vs. Integrated Micro Electronics |
| Converge Information vs. Globe Telecom | Converge Information vs. Century Pacific Food | Converge Information vs. Semirara Mining Corp | Converge Information vs. Top Frontier 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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