Correlation Between THORNEY TECHS and AdCapital
Can any of the company-specific risk be diversified away by investing in both THORNEY TECHS and AdCapital 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 THORNEY TECHS and AdCapital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THORNEY TECHS LTD and AdCapital AG, you can compare the effects of market volatilities on THORNEY TECHS and AdCapital 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 THORNEY TECHS with a short position of AdCapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and AdCapital.
Diversification Opportunities for THORNEY TECHS and AdCapital
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THORNEY and AdCapital is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and AdCapital AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdCapital AG and THORNEY TECHS 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 THORNEY TECHS LTD are associated (or correlated) with AdCapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdCapital AG has no effect on the direction of THORNEY TECHS i.e., THORNEY TECHS and AdCapital go up and down completely randomly.
Pair Corralation between THORNEY TECHS and AdCapital
Assuming the 90 days horizon THORNEY TECHS LTD is expected to under-perform the AdCapital. In addition to that, THORNEY TECHS is 1.36 times more volatile than AdCapital AG. It trades about -0.01 of its total potential returns per unit of risk. AdCapital AG is currently generating about 0.02 per unit of volatility. If you would invest 164.00 in AdCapital AG on November 27, 2024 and sell it today you would earn a total of 1.00 from holding AdCapital AG or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THORNEY TECHS LTD vs. AdCapital AG
Performance |
| Timeline |
| THORNEY TECHS LTD |
| AdCapital AG |
THORNEY TECHS and AdCapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THORNEY TECHS and AdCapital
The main advantage of trading using opposite THORNEY TECHS and AdCapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS position performs unexpectedly, AdCapital 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 AdCapital will offset losses from the drop in AdCapital's long position.| THORNEY TECHS vs. SENECA FOODS A | THORNEY TECHS vs. US Foods Holding | THORNEY TECHS vs. Broadridge Financial Solutions | THORNEY TECHS vs. GOLD ROAD RES |
| AdCapital vs. Gaztransport et technigaz | AdCapital vs. Geratherm Medical AG | AdCapital vs. Compugroup Medical SE | AdCapital vs. Merit Medical Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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