Correlation Between Coxon Precise and Acer E

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

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

Diversification Opportunities for Coxon Precise and Acer E

0.05

Correlation Coefficient

Coxon Precise  Acer E

Significant diversification

The 3 months correlation between Coxon and Acer is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Coxon Precise Industrial 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 Coxon Precise 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 Coxon Precise Industrial 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 Coxon Precise i.e., Coxon Precise and Acer E go up and down completely randomly.

Pair Corralation between Coxon Precise and Acer E

Assuming the 90 days trading horizon Coxon Precise Industrial is expected to under-perform the Acer E. In addition to that, Coxon Precise is 1.08 times more volatile than Acer E Enabling Service. It trades about 0.0 of its total potential returns per unit of risk. Acer E Enabling Service is currently generating about 0.02 per unit of volatility. If you would invest  27,850  in Acer E Enabling Service on October 4, 2024 and sell it today you would earn a total of  900.00  from holding Acer E Enabling Service or generate 3.23% return on investment over 90 days.

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

Coxon Precise Industrial  vs.  Acer E Enabling Service

Coxon Precise Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coxon Precise Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Coxon Precise 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

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Acer E Enabling Service are ranked lower than 8 (%) 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 Coxon Precise and Acer E

The main advantage of trading using opposite Coxon Precise and Acer E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coxon Precise 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 Coxon Precise Industrial 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 CEOs Directory module to screen CEOs from public companies around the world.