Correlation Between Octopus Aim and Admiral Group
Can any of the company-specific risk be diversified away by investing in both Octopus Aim and Admiral Group 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 Octopus Aim and Admiral Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Octopus Aim Vct and Admiral Group PLC, you can compare the effects of market volatilities on Octopus Aim and Admiral Group 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 Octopus Aim with a short position of Admiral Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Octopus Aim and Admiral Group.
Diversification Opportunities for Octopus Aim and Admiral Group
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Octopus and Admiral is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Octopus Aim Vct and Admiral Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admiral Group PLC and Octopus Aim 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 Octopus Aim Vct are associated (or correlated) with Admiral Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admiral Group PLC has no effect on the direction of Octopus Aim i.e., Octopus Aim and Admiral Group go up and down completely randomly.
Pair Corralation between Octopus Aim and Admiral Group
Assuming the 90 days trading horizon Octopus Aim Vct is expected to generate 0.49 times more return on investment than Admiral Group. However, Octopus Aim Vct is 2.02 times less risky than Admiral Group. It trades about -0.1 of its potential returns per unit of risk. Admiral Group PLC is currently generating about -0.18 per unit of risk. If you would invest 5,200 in Octopus Aim Vct on August 29, 2024 and sell it today you would lose (70.00) from holding Octopus Aim Vct or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Octopus Aim Vct vs. Admiral Group PLC
Performance |
| Timeline |
| Octopus Aim Vct |
| Admiral Group PLC |
Octopus Aim and Admiral Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Octopus Aim and Admiral Group
The main advantage of trading using opposite Octopus Aim and Admiral Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Octopus Aim position performs unexpectedly, Admiral Group 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 Admiral Group will offset losses from the drop in Admiral Group's long position.| Octopus Aim vs. Toyota Motor Corp | Octopus Aim vs. Lendinvest PLC | Octopus Aim vs. Neometals | Octopus Aim vs. Coor Service Management |
| Admiral Group vs. Power Metal Resources | Admiral Group vs. Fulcrum Metals PLC | Admiral Group vs. AMG Advanced Metallurgical | Admiral Group vs. Wheaton Precious Metals |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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