Correlation Between Sky Metals and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Sky Metals 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 Sky Metals and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and AiMedia Technologies, you can compare the effects of market volatilities on Sky Metals 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 Sky Metals with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and AiMedia Technologies.
Diversification Opportunities for Sky Metals and AiMedia Technologies
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sky and AiMedia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Sky Metals 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 Sky Metals 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 Sky Metals i.e., Sky Metals and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Sky Metals and AiMedia Technologies
Assuming the 90 days trading horizon Sky Metals is expected to generate 1.11 times more return on investment than AiMedia Technologies. However, Sky Metals is 1.11 times more volatile than AiMedia Technologies. It trades about 0.12 of its potential returns per unit of risk. AiMedia Technologies is currently generating about 0.0 per unit of risk. If you would invest 4.10 in Sky Metals on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Sky Metals or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sky Metals vs. AiMedia Technologies
Performance |
| Timeline |
| Sky Metals |
| AiMedia Technologies |
Sky Metals and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and AiMedia Technologies
The main advantage of trading using opposite Sky Metals and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals 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.| Sky Metals vs. Northern Star Resources | Sky Metals vs. Evolution Mining | Sky Metals vs. Bluescope Steel | Sky Metals vs. Sandfire Resources NL |
| AiMedia Technologies vs. Alto Metals | AiMedia Technologies vs. RLF AgTech | AiMedia Technologies vs. Readytech Holdings | AiMedia Technologies vs. Sky 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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