Correlation Between Actoz Soft and Wireless Power

Can any of the company-specific risk be diversified away by investing in both Actoz Soft and Wireless Power 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 Actoz Soft and Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Actoz Soft CoLtd and Wireless Power Amplifier, you can compare the effects of market volatilities on Actoz Soft and Wireless Power 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 Actoz Soft with a short position of Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actoz Soft and Wireless Power.

Diversification Opportunities for Actoz Soft and Wireless Power

-0.11

Correlation Coefficient

Actoz Soft  Wireless Power

Good diversification

The 3 months correlation between Actoz and Wireless is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Actoz Soft CoLtd and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier and Actoz Soft 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 Actoz Soft CoLtd are associated (or correlated) with Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Actoz Soft i.e., Actoz Soft and Wireless Power go up and down completely randomly.

Pair Corralation between Actoz Soft and Wireless Power

Assuming the 90 days trading horizon Actoz Soft CoLtd is expected to generate 1.65 times more return on investment than Wireless Power. However, Actoz Soft is 1.65 times more volatile than Wireless Power Amplifier. It trades about 0.05 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about -0.04 per unit of risk. If you would invest  685,000  in Actoz Soft CoLtd on September 18, 2024 and sell it today you would earn a total of  45,000  from holding Actoz Soft CoLtd or generate 6.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Actoz Soft CoLtd  vs.  Wireless Power Amplifier

Actoz Soft CoLtd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Actoz Soft CoLtd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Actoz Soft may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wireless Power Amplifier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wireless Power Amplifier has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wireless Power is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Actoz Soft and Wireless Power

The main advantage of trading using opposite Actoz Soft and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actoz Soft position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.

The idea behind Actoz Soft CoLtd and Wireless Power Amplifier pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.