Correlation Between Made Tech and Athelney Trust
Can any of the company-specific risk be diversified away by investing in both Made Tech and Athelney Trust 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 Made Tech and Athelney Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and Athelney Trust plc, you can compare the effects of market volatilities on Made Tech and Athelney Trust 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 Made Tech with a short position of Athelney Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Athelney Trust.
Diversification Opportunities for Made Tech and Athelney Trust
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Made and Athelney is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Athelney Trust plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athelney Trust plc and Made Tech 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 Made Tech Group are associated (or correlated) with Athelney Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athelney Trust plc has no effect on the direction of Made Tech i.e., Made Tech and Athelney Trust go up and down completely randomly.
Pair Corralation between Made Tech and Athelney Trust
Assuming the 90 days trading horizon Made Tech Group is expected to generate 5.22 times more return on investment than Athelney Trust. However, Made Tech is 5.22 times more volatile than Athelney Trust plc. It trades about 0.02 of its potential returns per unit of risk. Athelney Trust plc is currently generating about -0.02 per unit of risk. If you would invest 2,400 in Made Tech Group on September 3, 2024 and sell it today you would lose (100.00) from holding Made Tech Group or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Made Tech Group vs. Athelney Trust plc
Performance |
| Timeline |
| Made Tech Group |
| Athelney Trust plc |
Made Tech and Athelney Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Athelney Trust
The main advantage of trading using opposite Made Tech and Athelney Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, Athelney Trust 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 Athelney Trust will offset losses from the drop in Athelney Trust's long position.| Made Tech vs. Samsung Electronics Co | Made Tech vs. Samsung Electronics Co | Made Tech vs. Hyundai Motor | Made Tech vs. Toyota Motor Corp |
| Athelney Trust vs. AIM ImmunoTech | Athelney Trust vs. BE Semiconductor Industries | Athelney Trust vs. Made Tech Group | Athelney Trust vs. SMA Solar Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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