Correlation Between AKITA Drilling and Cheer Holding
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Cheer Holding 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 AKITA Drilling and Cheer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Cheer Holding, you can compare the effects of market volatilities on AKITA Drilling and Cheer Holding 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 AKITA Drilling with a short position of Cheer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Cheer Holding.
Diversification Opportunities for AKITA Drilling and Cheer Holding
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between AKITA and Cheer is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Cheer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheer Holding and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Cheer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheer Holding has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Cheer Holding go up and down completely randomly.
Pair Corralation between AKITA Drilling and Cheer Holding
Assuming the 90 days horizon AKITA Drilling is expected to generate 0.72 times more return on investment than Cheer Holding. However, AKITA Drilling is 1.39 times less risky than Cheer Holding. It trades about 0.13 of its potential returns per unit of risk. Cheer Holding is currently generating about -0.23 per unit of risk. If you would invest 111.00 in AKITA Drilling on December 27, 2024 and sell it today you would earn a total of 23.00 from holding AKITA Drilling or generate 20.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
AKITA Drilling vs. Cheer Holding
Performance |
Timeline |
AKITA Drilling |
Cheer Holding |
AKITA Drilling and Cheer Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AKITA Drilling and Cheer Holding
The main advantage of trading using opposite AKITA Drilling and Cheer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Cheer Holding 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 Cheer Holding will offset losses from the drop in Cheer Holding's long position.AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
Cheer Holding vs. Cebu Air ADR | Cheer Holding vs. Albertsons Companies | Cheer Holding vs. CVR Energy | Cheer Holding vs. Asbury Automotive Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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