Correlation Between First Copper and Acer E

Can any of the company-specific risk be diversified away by investing in both First Copper and Acer E 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 First Copper and Acer E into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Copper Technology and Acer E Enabling Service, you can compare the effects of market volatilities on First Copper and Acer E 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 First Copper with a short position of Acer E. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Copper and Acer E.

Diversification Opportunities for First Copper and Acer E

-0.23

Correlation Coefficient

First Copper  Acer E

Very good diversification

The 3 months correlation between First and Acer is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Copper Technology and Acer E Enabling Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acer E Enabling and First Copper 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 First Copper Technology are associated (or correlated) with Acer E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acer E Enabling has no effect on the direction of First Copper i.e., First Copper and Acer E go up and down completely randomly.

Pair Corralation between First Copper and Acer E

Assuming the 90 days trading horizon First Copper is expected to generate 3.15 times less return on investment than Acer E. But when comparing it to its historical volatility, First Copper Technology is 1.35 times less risky than Acer E. It trades about 0.03 of its potential returns per unit of risk. Acer E Enabling Service is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  12,425  in Acer E Enabling Service on September 14, 2024 and sell it today you would earn a total of  16,075  from holding Acer E Enabling Service or generate 129.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

First Copper Technology  vs.  Acer E Enabling Service

First Copper Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Copper Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, First Copper is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Acer E Enabling

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Acer E Enabling Service are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Acer E showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Copper and Acer E

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

The idea behind First Copper Technology and Acer E Enabling Service 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.