Correlation Between Information and Micro Leasing
Can any of the company-specific risk be diversified away by investing in both Information and Micro Leasing 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 Micro Leasing 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 Micro Leasing Public, you can compare the effects of market volatilities on Information and Micro Leasing 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 Micro Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information and Micro Leasing.
Diversification Opportunities for Information and Micro Leasing
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Information and Micro is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Information and Communication and Micro Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Leasing Public 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 Micro Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Leasing Public has no effect on the direction of Information i.e., Information and Micro Leasing go up and down completely randomly.
Pair Corralation between Information and Micro Leasing
Assuming the 90 days trading horizon Information and Communication is expected to generate 0.59 times more return on investment than Micro Leasing. However, Information and Communication is 1.7 times less risky than Micro Leasing. It trades about -0.03 of its potential returns per unit of risk. Micro Leasing Public is currently generating about -0.07 per unit of risk. If you would invest 326.00 in Information and Communication on September 3, 2024 and sell it today you would lose (110.00) from holding Information and Communication or give up 33.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information and Communication vs. Micro Leasing Public
Performance |
| Timeline |
| Information and Comm |
| Micro Leasing Public |
Information and Micro Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information and Micro Leasing
The main advantage of trading using opposite Information and Micro Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information position performs unexpectedly, Micro Leasing 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 Micro Leasing will offset losses from the drop in Micro Leasing's long position.| Information vs. Hana Microelectronics Public | Information vs. Ekachai Medical Care | Information vs. Megachem Public | Information vs. Intouch Holdings Public |
| Micro Leasing vs. Amanah Leasing Public | Micro Leasing vs. Muangthai Capital Public | Micro Leasing vs. Infraset Public | Micro Leasing vs. JMT Network Services |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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