Correlation Between PDF Solutions and New Asia
Can any of the company-specific risk be diversified away by investing in both PDF Solutions and New Asia 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 PDF Solutions and New Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDF Solutions and New Asia Holdings, you can compare the effects of market volatilities on PDF Solutions and New Asia 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 PDF Solutions with a short position of New Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDF Solutions and New Asia.
Diversification Opportunities for PDF Solutions and New Asia
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between PDF and New is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PDF Solutions and New Asia Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Asia Holdings and PDF Solutions 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 PDF Solutions are associated (or correlated) with New Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Asia Holdings has no effect on the direction of PDF Solutions i.e., PDF Solutions and New Asia go up and down completely randomly.
Pair Corralation between PDF Solutions and New Asia
Given the investment horizon of 90 days PDF Solutions is expected to generate 0.15 times more return on investment than New Asia. However, PDF Solutions is 6.52 times less risky than New Asia. It trades about 0.23 of its potential returns per unit of risk. New Asia Holdings is currently generating about -0.34 per unit of risk. If you would invest 2,832 in PDF Solutions on September 1, 2024 and sell it today you would earn a total of 328.00 from holding PDF Solutions or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PDF Solutions vs. New Asia Holdings
Performance |
| Timeline |
| PDF Solutions |
| New Asia Holdings |
PDF Solutions and New Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDF Solutions and New Asia
The main advantage of trading using opposite PDF Solutions and New Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDF Solutions position performs unexpectedly, New Asia 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 New Asia will offset losses from the drop in New Asia's long position.| PDF Solutions vs. Progress Software | PDF Solutions vs. PROS Holdings | PDF Solutions vs. Sapiens International | PDF Solutions vs. Meridianlink |
| New Asia vs. Research Solutions | New Asia vs. Red Violet | New Asia vs. Meridianlink | New Asia vs. PDF Solutions |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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