Correlation Between Albion Technology and General Accident
Can any of the company-specific risk be diversified away by investing in both Albion Technology and General Accident 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 Albion Technology and General Accident into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and General Accident plc, you can compare the effects of market volatilities on Albion Technology and General Accident 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 Albion Technology with a short position of General Accident. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and General Accident.
Diversification Opportunities for Albion Technology and General Accident
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Albion and General is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and General Accident plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Accident plc and Albion Technology 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 Albion Technology General are associated (or correlated) with General Accident. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Accident plc has no effect on the direction of Albion Technology i.e., Albion Technology and General Accident go up and down completely randomly.
Pair Corralation between Albion Technology and General Accident
Assuming the 90 days trading horizon Albion Technology General is expected to generate 2.43 times more return on investment than General Accident. However, Albion Technology is 2.43 times more volatile than General Accident plc. It trades about -0.04 of its potential returns per unit of risk. General Accident plc is currently generating about -0.1 per unit of risk. If you would invest 6,962 in Albion Technology General on October 23, 2024 and sell it today you would lose (162.00) from holding Albion Technology General or give up 2.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Albion Technology General vs. General Accident plc
Performance |
Timeline |
Albion Technology General |
General Accident plc |
Albion Technology and General Accident Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Albion Technology and General Accident
The main advantage of trading using opposite Albion Technology and General Accident positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology position performs unexpectedly, General Accident 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 General Accident will offset losses from the drop in General Accident's long position.Albion Technology vs. United Airlines Holdings | Albion Technology vs. MyHealthChecked Plc | Albion Technology vs. Centaur Media | Albion Technology vs. Flutter Entertainment PLC |
General Accident vs. Air Products Chemicals | General Accident vs. Catalyst Media Group | General Accident vs. Grand Vision Media | General Accident vs. JB Hunt Transport |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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