Correlation Between Premier Technology and Autocorp Holding
Can any of the company-specific risk be diversified away by investing in both Premier Technology and Autocorp Holding 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 Premier Technology and Autocorp Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Technology Public and Autocorp Holding Public, you can compare the effects of market volatilities on Premier Technology and Autocorp Holding 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 Premier Technology with a short position of Autocorp Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Technology and Autocorp Holding.
Diversification Opportunities for Premier Technology and Autocorp Holding
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Premier and Autocorp is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Premier Technology Public and Autocorp Holding Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autocorp Holding Public and Premier Technology 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 Premier Technology Public are associated (or correlated) with Autocorp Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autocorp Holding Public has no effect on the direction of Premier Technology i.e., Premier Technology and Autocorp Holding go up and down completely randomly.
Pair Corralation between Premier Technology and Autocorp Holding
Assuming the 90 days horizon Premier Technology Public is expected to generate 1.0 times more return on investment than Autocorp Holding. However, Premier Technology Public is 1.0 times less risky than Autocorp Holding. It trades about 0.07 of its potential returns per unit of risk. Autocorp Holding Public is currently generating about 0.07 per unit of risk. If you would invest 764.00 in Premier Technology Public on September 3, 2024 and sell it today you would earn a total of 181.00 from holding Premier Technology Public or generate 23.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Technology Public vs. Autocorp Holding Public
Performance |
| Timeline |
| Premier Technology Public |
| Autocorp Holding Public |
Premier Technology and Autocorp Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Technology and Autocorp Holding
The main advantage of trading using opposite Premier Technology and Autocorp Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Technology position performs unexpectedly, Autocorp Holding 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 Autocorp Holding will offset losses from the drop in Autocorp Holding's long position.| Premier Technology vs. KCE Electronics Public | Premier Technology vs. Land and Houses | Premier Technology vs. Delta Electronics Public | Premier Technology vs. The Siam Cement |
| Autocorp Holding vs. Amanah Leasing Public | Autocorp Holding vs. Asia Fiber Public | Autocorp Holding vs. Ingress Industrial Public | Autocorp Holding vs. Ekarat Engineering Public |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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