Correlation Between Advanced Braking and Bio Gene
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and Bio Gene 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 Advanced Braking and Bio Gene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and Bio Gene Technology, you can compare the effects of market volatilities on Advanced Braking and Bio Gene 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 Advanced Braking with a short position of Bio Gene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and Bio Gene.
Diversification Opportunities for Advanced Braking and Bio Gene
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Bio is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and Bio Gene Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Gene Technology and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with Bio Gene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Gene Technology has no effect on the direction of Advanced Braking i.e., Advanced Braking and Bio Gene go up and down completely randomly.
Pair Corralation between Advanced Braking and Bio Gene
Assuming the 90 days trading horizon Advanced Braking Technology is expected to generate 0.61 times more return on investment than Bio Gene. However, Advanced Braking Technology is 1.65 times less risky than Bio Gene. It trades about 0.12 of its potential returns per unit of risk. Bio Gene Technology is currently generating about 0.0 per unit of risk. If you would invest 7.30 in Advanced Braking Technology on September 6, 2024 and sell it today you would earn a total of 1.50 from holding Advanced Braking Technology or generate 20.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Advanced Braking Technology vs. Bio Gene Technology
Performance |
Timeline |
Advanced Braking Tec |
Bio Gene Technology |
Advanced Braking and Bio Gene Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advanced Braking and Bio Gene
The main advantage of trading using opposite Advanced Braking and Bio Gene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, Bio Gene 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 Bio Gene will offset losses from the drop in Bio Gene's long position.Advanced Braking vs. Aneka Tambang Tbk | Advanced Braking vs. Commonwealth Bank | Advanced Braking vs. Commonwealth Bank of | Advanced Braking vs. Australia and New |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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