Correlation Between Dufu Tech and Alliance Financial
Can any of the company-specific risk be diversified away by investing in both Dufu Tech and Alliance Financial 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 Dufu Tech and Alliance Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dufu Tech Corp and Alliance Financial Group, you can compare the effects of market volatilities on Dufu Tech and Alliance Financial 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 Dufu Tech with a short position of Alliance Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dufu Tech and Alliance Financial.
Diversification Opportunities for Dufu Tech and Alliance Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dufu and Alliance is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dufu Tech Corp and Alliance Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Financial and Dufu Tech 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 Dufu Tech Corp are associated (or correlated) with Alliance Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Financial has no effect on the direction of Dufu Tech i.e., Dufu Tech and Alliance Financial go up and down completely randomly.
Pair Corralation between Dufu Tech and Alliance Financial
Assuming the 90 days trading horizon Dufu Tech is expected to generate 4.6 times less return on investment than Alliance Financial. In addition to that, Dufu Tech is 2.0 times more volatile than Alliance Financial Group. It trades about 0.02 of its total potential returns per unit of risk. Alliance Financial Group is currently generating about 0.15 per unit of volatility. If you would invest 344.00 in Alliance Financial Group on October 22, 2024 and sell it today you would earn a total of 186.00 from holding Alliance Financial Group or generate 54.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dufu Tech Corp vs. Alliance Financial Group
Performance |
Timeline |
Dufu Tech Corp |
Alliance Financial |
Dufu Tech and Alliance Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dufu Tech and Alliance Financial
The main advantage of trading using opposite Dufu Tech and Alliance Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dufu Tech position performs unexpectedly, Alliance Financial 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 Alliance Financial will offset losses from the drop in Alliance Financial's long position.Dufu Tech vs. Greatech Technology Bhd | Dufu Tech vs. Southern Steel Bhd | Dufu Tech vs. Choo Bee Metal | Dufu Tech vs. Computer Forms Bhd |
Alliance Financial vs. Dufu Tech Corp | Alliance Financial vs. Cloudpoint Technology Berhad | Alliance Financial vs. EA Technique M | Alliance Financial vs. Resintech Bhd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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