Correlation Between New Advanced and Space Shuttle
Can any of the company-specific risk be diversified away by investing in both New Advanced and Space Shuttle 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 Space Shuttle 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 Space Shuttle Hi Tech, you can compare the effects of market volatilities on New Advanced and Space Shuttle 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 Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and Space Shuttle.
Diversification Opportunities for New Advanced and Space Shuttle
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Space is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi 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 Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of New Advanced i.e., New Advanced and Space Shuttle go up and down completely randomly.
Pair Corralation between New Advanced and Space Shuttle
Assuming the 90 days trading horizon New Advanced Electronics is expected to generate 1.54 times more return on investment than Space Shuttle. However, New Advanced is 1.54 times more volatile than Space Shuttle Hi Tech. It trades about 0.19 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about -0.05 per unit of risk. If you would invest 5,340 in New Advanced Electronics on December 4, 2024 and sell it today you would earn a total of 1,320 from holding New Advanced Electronics or generate 24.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.21% |
Values | Daily Returns |
New Advanced Electronics vs. Space Shuttle Hi Tech
Performance |
Timeline |
New Advanced Electronics |
Space Shuttle Hi |
New Advanced and Space Shuttle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Advanced and Space Shuttle
The main advantage of trading using opposite New Advanced and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle's long position.New Advanced vs. Farglory FTZ Investment | New Advanced vs. Grand Ocean Retail | New Advanced vs. Trade Van Information Services | New Advanced vs. WinMate Communication INC |
Space Shuttle vs. Universal Microelectronics Co | Space Shuttle vs. Greatek Electronics | Space Shuttle vs. Phihong Technology Co | Space Shuttle vs. Zippy Technology Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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