Correlation Between Auden Techno and Loop Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Auden Techno and Loop Telecommunicatio 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 Auden Techno and Loop Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Auden Techno and Loop Telecommunication International, you can compare the effects of market volatilities on Auden Techno and Loop Telecommunicatio 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 Auden Techno with a short position of Loop Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auden Techno and Loop Telecommunicatio.

Diversification Opportunities for Auden Techno and Loop Telecommunicatio

0.31

Correlation Coefficient

Auden Techno  Loop Telecommunicatio

Weak diversification

The 3 months correlation between Auden and Loop is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Auden Techno and Loop Telecommunication Interna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Telecommunication and Auden Techno 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 Auden Techno are associated (or correlated) with Loop Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Telecommunication has no effect on the direction of Auden Techno i.e., Auden Techno and Loop Telecommunicatio go up and down completely randomly.

Pair Corralation between Auden Techno and Loop Telecommunicatio

Assuming the 90 days trading horizon Auden Techno is expected to under-perform the Loop Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Auden Techno is 1.68 times less risky than Loop Telecommunicatio. The stock trades about -0.01 of its potential returns per unit of risk. The Loop Telecommunication International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,065  in Loop Telecommunication International on October 6, 2024 and sell it today you would earn a total of  5,935  from holding Loop Telecommunication International or generate 287.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Auden Techno  vs.  Loop Telecommunication Interna

Auden Techno

Risk-Adjusted Performance

0 of 100

Very Weak

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

Loop Telecommunication

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Loop Telecommunication International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Loop Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Auden Techno and Loop Telecommunicatio

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

The idea behind Auden Techno and Loop Telecommunication International 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.