Correlation Between Addentax Group and Royal Mail
Can any of the company-specific risk be diversified away by investing in both Addentax Group and Royal Mail 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 Addentax Group and Royal Mail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addentax Group Corp and Royal Mail PLC, you can compare the effects of market volatilities on Addentax Group and Royal Mail 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 Addentax Group with a short position of Royal Mail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addentax Group and Royal Mail.
Diversification Opportunities for Addentax Group and Royal Mail
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Addentax and Royal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Addentax Group Corp and Royal Mail PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Mail PLC and Addentax Group 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 Addentax Group Corp are associated (or correlated) with Royal Mail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Mail PLC has no effect on the direction of Addentax Group i.e., Addentax Group and Royal Mail go up and down completely randomly.
Pair Corralation between Addentax Group and Royal Mail
Given the investment horizon of 90 days Addentax Group Corp is expected to under-perform the Royal Mail. In addition to that, Addentax Group is 11.55 times more volatile than Royal Mail PLC. It trades about -0.01 of its total potential returns per unit of risk. Royal Mail PLC is currently generating about 0.15 per unit of volatility. If you would invest 893.00 in Royal Mail PLC on October 4, 2024 and sell it today you would earn a total of 15.00 from holding Royal Mail PLC or generate 1.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Addentax Group Corp vs. Royal Mail PLC
Performance |
Timeline |
Addentax Group Corp |
Royal Mail PLC |
Addentax Group and Royal Mail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Addentax Group and Royal Mail
The main advantage of trading using opposite Addentax Group and Royal Mail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addentax Group position performs unexpectedly, Royal Mail 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 Royal Mail will offset losses from the drop in Royal Mail's long position.Addentax Group vs. Jayud Global Logistics | Addentax Group vs. Freightos Limited Ordinary | Addentax Group vs. Radiant Logistics | Addentax Group vs. JB Hunt Transport |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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