Correlation Between 00440EAQ0 and 51Talk Online

Can any of the company-specific risk be diversified away by investing in both 00440EAQ0 and 51Talk Online 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 00440EAQ0 and 51Talk Online into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACE INA HLDGS and 51Talk Online Education, you can compare the effects of market volatilities on 00440EAQ0 and 51Talk Online 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 00440EAQ0 with a short position of 51Talk Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00440EAQ0 and 51Talk Online.

Diversification Opportunities for 00440EAQ0 and 51Talk Online

0.06

Correlation Coefficient

00440EAQ0  51Talk Online

Significant diversification

The 3 months correlation between 00440EAQ0 and 51Talk is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ACE INA HLDGS and 51Talk Online Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 51Talk Online Education and 00440EAQ0 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 ACE INA HLDGS are associated (or correlated) with 51Talk Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 51Talk Online Education has no effect on the direction of 00440EAQ0 i.e., 00440EAQ0 and 51Talk Online go up and down completely randomly.

Pair Corralation between 00440EAQ0 and 51Talk Online

Assuming the 90 days trading horizon ACE INA HLDGS is expected to under-perform the 51Talk Online. But the bond apears to be less risky and, when comparing its historical volatility, ACE INA HLDGS is 4.62 times less risky than 51Talk Online. The bond trades about -0.09 of its potential returns per unit of risk. The 51Talk Online Education is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,436  in 51Talk Online Education on September 4, 2024 and sell it today you would lose (50.00) from holding 51Talk Online Education or give up 3.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	42.19%
Values	Daily Returns

ACE INA HLDGS  vs.  51Talk Online Education

ACE INA HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACE INA HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 00440EAQ0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

51Talk Online Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 51Talk Online Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 51Talk Online is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 00440EAQ0 and 51Talk Online

The main advantage of trading using opposite 00440EAQ0 and 51Talk Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00440EAQ0 position performs unexpectedly, 51Talk Online 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 51Talk Online will offset losses from the drop in 51Talk Online's long position.

The idea behind ACE INA HLDGS and 51Talk Online Education 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.