Correlation Between ABACUS STORAGE and Home Consortium

Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Home Consortium 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 ABACUS STORAGE and Home Consortium into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ABACUS STORAGE KING and Home Consortium, you can compare the effects of market volatilities on ABACUS STORAGE and Home Consortium 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 ABACUS STORAGE with a short position of Home Consortium. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Home Consortium.

Diversification Opportunities for ABACUS STORAGE and Home Consortium

-0.77

Correlation Coefficient

ABACUS STORAGE  Home Consortium

Pay attention - limited upside

The 3 months correlation between ABACUS and Home is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Home Consortium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Consortium and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Home Consortium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Consortium has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Home Consortium go up and down completely randomly.

Pair Corralation between ABACUS STORAGE and Home Consortium

Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 0.27 times more return on investment than Home Consortium. However, ABACUS STORAGE KING is 3.69 times less risky than Home Consortium. It trades about -0.14 of its potential returns per unit of risk. Home Consortium is currently generating about -0.2 per unit of risk. If you would invest  119.00  in ABACUS STORAGE KING on September 23, 2024 and sell it today you would lose (4.00) from holding ABACUS STORAGE KING or give up 3.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ABACUS STORAGE KING  vs.  Home Consortium

ABACUS STORAGE KING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABACUS STORAGE KING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Home Consortium

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Home Consortium are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Home Consortium unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ABACUS STORAGE and Home Consortium

The main advantage of trading using opposite ABACUS STORAGE and Home Consortium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Home Consortium 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 Home Consortium will offset losses from the drop in Home Consortium's long position.

The idea behind ABACUS STORAGE KING and Home Consortium pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.