Correlation Between Photomyne and Aerodrome
Can any of the company-specific risk be diversified away by investing in both Photomyne and Aerodrome 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 Photomyne and Aerodrome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photomyne and Aerodrome Group, you can compare the effects of market volatilities on Photomyne and Aerodrome 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 Photomyne with a short position of Aerodrome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photomyne and Aerodrome.
Diversification Opportunities for Photomyne and Aerodrome
Poor diversification
The 3 months correlation between Photomyne and Aerodrome is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Photomyne and Aerodrome Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerodrome Group and Photomyne 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 Photomyne are associated (or correlated) with Aerodrome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerodrome Group has no effect on the direction of Photomyne i.e., Photomyne and Aerodrome go up and down completely randomly.
Pair Corralation between Photomyne and Aerodrome
Assuming the 90 days trading horizon Photomyne is expected to generate 3.61 times less return on investment than Aerodrome. But when comparing it to its historical volatility, Photomyne is 11.35 times less risky than Aerodrome. It trades about 0.27 of its potential returns per unit of risk. Aerodrome Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,480 in Aerodrome Group on September 4, 2024 and sell it today you would earn a total of 2,120 from holding Aerodrome Group or generate 38.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photomyne vs. Aerodrome Group
Performance |
| Timeline |
| Photomyne |
| Aerodrome Group |
Photomyne and Aerodrome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photomyne and Aerodrome
The main advantage of trading using opposite Photomyne and Aerodrome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photomyne position performs unexpectedly, Aerodrome 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 Aerodrome will offset losses from the drop in Aerodrome's long position.| Photomyne vs. Magic Software Enterprises | Photomyne vs. Rapac Communication Infrastructure | Photomyne vs. Millennium Food Tech LP | Photomyne vs. Israel China Biotechnology |
| Aerodrome vs. One Software Technologies | Aerodrome vs. Suny Cellular Communication | Aerodrome vs. Multi Retail Group | Aerodrome vs. B Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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