Correlation Between Tower Investments and AC SA
Can any of the company-specific risk be diversified away by investing in both Tower Investments and AC SA 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 Tower Investments and AC SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Investments SA and AC SA, you can compare the effects of market volatilities on Tower Investments and AC SA 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 Tower Investments with a short position of AC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Investments and AC SA.
Diversification Opportunities for Tower Investments and AC SA
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tower and ACG is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tower Investments SA and AC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC SA and Tower Investments 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 Tower Investments SA are associated (or correlated) with AC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC SA has no effect on the direction of Tower Investments i.e., Tower Investments and AC SA go up and down completely randomly.
Pair Corralation between Tower Investments and AC SA
Assuming the 90 days trading horizon Tower Investments SA is expected to under-perform the AC SA. In addition to that, Tower Investments is 2.88 times more volatile than AC SA. It trades about -0.01 of its total potential returns per unit of risk. AC SA is currently generating about 0.12 per unit of volatility. If you would invest 2,740 in AC SA on August 30, 2024 and sell it today you would earn a total of 80.00 from holding AC SA or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Tower Investments SA vs. AC SA
Performance |
| Timeline |
| Tower Investments |
| AC SA |
Tower Investments and AC SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Investments and AC SA
The main advantage of trading using opposite Tower Investments and AC SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Investments position performs unexpectedly, AC SA 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 AC SA will offset losses from the drop in AC SA's long position.| Tower Investments vs. TEN SQUARE GAMES | Tower Investments vs. SOFTWARE MANSION SPOLKA | Tower Investments vs. Enter Air SA | Tower Investments vs. Inter Cars SA |
| AC SA vs. Tower Investments SA | AC SA vs. PZ Cormay SA | AC SA vs. MW Trade SA | AC SA vs. Intersport Polska SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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