Correlation Between Ora Banda and Advanced Braking
Can any of the company-specific risk be diversified away by investing in both Ora Banda and Advanced Braking 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 Ora Banda and Advanced Braking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ora Banda Mining and Advanced Braking Technology, you can compare the effects of market volatilities on Ora Banda and Advanced Braking 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 Ora Banda with a short position of Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ora Banda and Advanced Braking.
Diversification Opportunities for Ora Banda and Advanced Braking
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ora and Advanced is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ora Banda Mining and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec and Ora Banda 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 Ora Banda Mining are associated (or correlated) with Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Ora Banda i.e., Ora Banda and Advanced Braking go up and down completely randomly.
Pair Corralation between Ora Banda and Advanced Braking
Assuming the 90 days trading horizon Ora Banda Mining is expected to under-perform the Advanced Braking. In addition to that, Ora Banda is 1.81 times more volatile than Advanced Braking Technology. It trades about -0.25 of its total potential returns per unit of risk. Advanced Braking Technology is currently generating about 0.3 per unit of volatility. If you would invest 7.70 in Advanced Braking Technology on August 28, 2024 and sell it today you would earn a total of 1.20 from holding Advanced Braking Technology or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ora Banda Mining vs. Advanced Braking Technology
Performance |
| Timeline |
| Ora Banda Mining |
| Advanced Braking Tec |
Ora Banda and Advanced Braking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ora Banda and Advanced Braking
The main advantage of trading using opposite Ora Banda and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ora Banda position performs unexpectedly, Advanced Braking 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 Advanced Braking will offset losses from the drop in Advanced Braking's long position.| Ora Banda vs. Northern Star Resources | Ora Banda vs. Evolution Mining | Ora Banda vs. Bluescope Steel | Ora Banda vs. Sandfire Resources NL |
| Advanced Braking vs. Aneka Tambang Tbk | Advanced Braking vs. BHP Group Limited | Advanced Braking vs. Rio Tinto | Advanced Braking vs. Macquarie Group Ltd |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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