Correlation Between Information and ALL ENERGY
Can any of the company-specific risk be diversified away by investing in both Information and ALL ENERGY 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 Information and ALL ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information and Communication and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on Information and ALL ENERGY 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 Information with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information and ALL ENERGY.
Diversification Opportunities for Information and ALL ENERGY
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Information and ALL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Information and Communication and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and Information 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 Information and Communication are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of Information i.e., Information and ALL ENERGY go up and down completely randomly.
Pair Corralation between Information and ALL ENERGY
Assuming the 90 days trading horizon Information and Communication is expected to generate 0.51 times more return on investment than ALL ENERGY. However, Information and Communication is 1.98 times less risky than ALL ENERGY. It trades about -0.03 of its potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about -0.04 per unit of risk. If you would invest 326.00 in Information and Communication on September 2, 2024 and sell it today you would lose (106.00) from holding Information and Communication or give up 32.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Information and Communication vs. ALL ENERGY UTILITIES
Performance |
| Timeline |
| Information and Comm |
| ALL ENERGY UTILITIES |
Information and ALL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information and ALL ENERGY
The main advantage of trading using opposite Information and ALL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information position performs unexpectedly, ALL ENERGY 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 ALL ENERGY will offset losses from the drop in ALL ENERGY's long position.| Information vs. Hana Microelectronics Public | Information vs. Ekachai Medical Care | Information vs. Megachem Public | Information vs. Diamond Building Products |
| ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY vs. Lohakit Metal Public |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |