Correlation Between Satcom Systems and Abra Information
Can any of the company-specific risk be diversified away by investing in both Satcom Systems and Abra Information 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 Satcom Systems and Abra Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satcom Systems and Abra Information Technologies, you can compare the effects of market volatilities on Satcom Systems and Abra Information 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 Satcom Systems with a short position of Abra Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satcom Systems and Abra Information.
Diversification Opportunities for Satcom Systems and Abra Information
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Satcom and Abra is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Satcom Systems and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Satcom Systems 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 Satcom Systems are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Satcom Systems i.e., Satcom Systems and Abra Information go up and down completely randomly.
Pair Corralation between Satcom Systems and Abra Information
Assuming the 90 days trading horizon Satcom Systems is expected to generate 1.28 times more return on investment than Abra Information. However, Satcom Systems is 1.28 times more volatile than Abra Information Technologies. It trades about 0.07 of its potential returns per unit of risk. Abra Information Technologies is currently generating about -0.1 per unit of risk. If you would invest 6,600 in Satcom Systems on September 14, 2024 and sell it today you would earn a total of 210.00 from holding Satcom Systems or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Satcom Systems vs. Abra Information Technologies
Performance |
| Timeline |
| Satcom Systems |
| Abra Information Tec |
Satcom Systems and Abra Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satcom Systems and Abra Information
The main advantage of trading using opposite Satcom Systems and Abra Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satcom Systems position performs unexpectedly, Abra Information 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 Abra Information will offset losses from the drop in Abra Information's long position.| Satcom Systems vs. Abra Information Technologies | Satcom Systems vs. Suny Cellular Communication | Satcom Systems vs. Rimon Consulting Management | Satcom Systems vs. Storage Drop Storage |
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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 Stocks Directory module to find actively traded stocks across global markets.
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