Correlation Between New Advanced and Allied Industrial
Can any of the company-specific risk be diversified away by investing in both New Advanced and Allied Industrial 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 New Advanced and Allied Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Advanced Electronics and Allied Industrial, you can compare the effects of market volatilities on New Advanced and Allied Industrial 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 New Advanced with a short position of Allied Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and Allied Industrial.
Diversification Opportunities for New Advanced and Allied Industrial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Allied is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and Allied Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Industrial and New Advanced 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 New Advanced Electronics are associated (or correlated) with Allied Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Industrial has no effect on the direction of New Advanced i.e., New Advanced and Allied Industrial go up and down completely randomly.
Pair Corralation between New Advanced and Allied Industrial
Assuming the 90 days trading horizon New Advanced Electronics is expected to under-perform the Allied Industrial. In addition to that, New Advanced is 2.21 times more volatile than Allied Industrial. It trades about -0.02 of its total potential returns per unit of risk. Allied Industrial is currently generating about 0.0 per unit of volatility. If you would invest 1,265 in Allied Industrial on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Allied Industrial or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
New Advanced Electronics vs. Allied Industrial
Performance |
Timeline |
New Advanced Electronics |
Allied Industrial |
New Advanced and Allied Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Advanced and Allied Industrial
The main advantage of trading using opposite New Advanced and Allied Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced position performs unexpectedly, Allied Industrial 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 Allied Industrial will offset losses from the drop in Allied Industrial's long position.New Advanced vs. Allied Industrial | New Advanced vs. Phoenix Silicon International | New Advanced vs. Acelon Chemicals Fiber | New Advanced vs. Shiny Chemical Industrial |
Allied Industrial vs. Wha Yu Industrial | Allied Industrial vs. Taiwan Chinsan Electronic | Allied Industrial vs. Song Ho Industrial | Allied Industrial vs. C Media Electronics |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Stocks Directory Find actively traded stocks across global markets | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |