Correlation Between Ora Banda and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Ora Banda and AiMedia Technologies 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 AiMedia Technologies 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 AiMedia Technologies, you can compare the effects of market volatilities on Ora Banda and AiMedia Technologies 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 AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ora Banda and AiMedia Technologies.
Diversification Opportunities for Ora Banda and AiMedia Technologies
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ora and AiMedia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ora Banda Mining and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies 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 AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Ora Banda i.e., Ora Banda and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Ora Banda and AiMedia Technologies
Assuming the 90 days trading horizon Ora Banda Mining is expected to generate 1.0 times more return on investment than AiMedia Technologies. However, Ora Banda Mining is 1.0 times less risky than AiMedia Technologies. It trades about 0.16 of its potential returns per unit of risk. AiMedia Technologies is currently generating about 0.16 per unit of risk. If you would invest 31.00 in Ora Banda Mining on September 3, 2024 and sell it today you would earn a total of 42.00 from holding Ora Banda Mining or generate 135.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ora Banda Mining vs. AiMedia Technologies
Performance |
| Timeline |
| Ora Banda Mining |
| AiMedia Technologies |
Ora Banda and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ora Banda and AiMedia Technologies
The main advantage of trading using opposite Ora Banda and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ora Banda position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Ora Banda vs. Northern Star Resources | Ora Banda vs. Evolution Mining | Ora Banda vs. Bluescope Steel | Ora Banda vs. Aneka Tambang Tbk |
| AiMedia Technologies vs. Encounter Resources | AiMedia Technologies vs. Tlou Energy | AiMedia Technologies vs. Superior Resources | AiMedia Technologies vs. Peel Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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