Correlation Between SR Accord and Nextcom
Can any of the company-specific risk be diversified away by investing in both SR Accord and Nextcom 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 SR Accord and Nextcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SR Accord and Nextcom, you can compare the effects of market volatilities on SR Accord and Nextcom 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 SR Accord with a short position of Nextcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of SR Accord and Nextcom.
Diversification Opportunities for SR Accord and Nextcom
Very poor diversification
The 3 months correlation between SRAC and Nextcom is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SR Accord and Nextcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextcom and SR Accord 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 SR Accord are associated (or correlated) with Nextcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextcom has no effect on the direction of SR Accord i.e., SR Accord and Nextcom go up and down completely randomly.
Pair Corralation between SR Accord and Nextcom
Assuming the 90 days trading horizon SR Accord is expected to generate 1.1 times less return on investment than Nextcom. In addition to that, SR Accord is 1.05 times more volatile than Nextcom. It trades about 0.04 of its total potential returns per unit of risk. Nextcom is currently generating about 0.05 per unit of volatility. If you would invest 55,740 in Nextcom on November 2, 2024 and sell it today you would earn a total of 26,340 from holding Nextcom or generate 47.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SR Accord vs. Nextcom
Performance |
| Timeline |
| SR Accord |
| Nextcom |
SR Accord and Nextcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SR Accord and Nextcom
The main advantage of trading using opposite SR Accord and Nextcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SR Accord position performs unexpectedly, Nextcom 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 Nextcom will offset losses from the drop in Nextcom's long position.| SR Accord vs. EN Shoham Business | SR Accord vs. Rani Zim Shopping | SR Accord vs. Mivtach Shamir | SR Accord vs. Accel Solutions Group |
| Nextcom vs. EN Shoham Business | Nextcom vs. Accel Solutions Group | Nextcom vs. SR Accord | Nextcom vs. Rapac Communication Infrastructure |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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