Correlation Between Flexium Interconnect and Actron Technology
Can any of the company-specific risk be diversified away by investing in both Flexium Interconnect and Actron Technology 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 Flexium Interconnect and Actron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexium Interconnect and Actron Technology, you can compare the effects of market volatilities on Flexium Interconnect and Actron Technology 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 Flexium Interconnect with a short position of Actron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexium Interconnect and Actron Technology.
Diversification Opportunities for Flexium Interconnect and Actron Technology
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flexium and Actron is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Flexium Interconnect and Actron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actron Technology and Flexium Interconnect 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 Flexium Interconnect are associated (or correlated) with Actron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actron Technology has no effect on the direction of Flexium Interconnect i.e., Flexium Interconnect and Actron Technology go up and down completely randomly.
Pair Corralation between Flexium Interconnect and Actron Technology
Assuming the 90 days trading horizon Flexium Interconnect is expected to generate 1.74 times more return on investment than Actron Technology. However, Flexium Interconnect is 1.74 times more volatile than Actron Technology. It trades about 0.08 of its potential returns per unit of risk. Actron Technology is currently generating about 0.08 per unit of risk. If you would invest 6,530 in Flexium Interconnect on December 5, 2024 and sell it today you would earn a total of 270.00 from holding Flexium Interconnect or generate 4.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Flexium Interconnect vs. Actron Technology
Performance |
Timeline |
Flexium Interconnect |
Actron Technology |
Flexium Interconnect and Actron Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flexium Interconnect and Actron Technology
The main advantage of trading using opposite Flexium Interconnect and Actron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexium Interconnect position performs unexpectedly, Actron Technology 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 Actron Technology will offset losses from the drop in Actron Technology's long position.Flexium Interconnect vs. Zhen Ding Technology | Flexium Interconnect vs. Catcher Technology Co | Flexium Interconnect vs. Unimicron Technology Corp | Flexium Interconnect vs. Career Technology MFG |
Actron Technology vs. Advanced Wireless Semiconductor | Actron Technology vs. Powerchip Semiconductor Manufacturing | Actron Technology vs. Newretail Co | Actron Technology vs. Genovate Biotechnology Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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