Correlation Between Avax SA and Technical Olympic

Can any of the company-specific risk be diversified away by investing in both Avax SA and Technical Olympic 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 Avax SA and Technical Olympic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Avax SA and Technical Olympic SA, you can compare the effects of market volatilities on Avax SA and Technical Olympic 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 Avax SA with a short position of Technical Olympic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avax SA and Technical Olympic.

Diversification Opportunities for Avax SA and Technical Olympic

0.1

Correlation Coefficient

Avax SA  Technical Olympic

Average diversification

The 3 months correlation between Avax and Technical is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Avax SA and Technical Olympic SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technical Olympic and Avax SA 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 Avax SA are associated (or correlated) with Technical Olympic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technical Olympic has no effect on the direction of Avax SA i.e., Avax SA and Technical Olympic go up and down completely randomly.

Pair Corralation between Avax SA and Technical Olympic

Assuming the 90 days trading horizon Avax SA is expected to generate 1.49 times more return on investment than Technical Olympic. However, Avax SA is 1.49 times more volatile than Technical Olympic SA. It trades about 0.11 of its potential returns per unit of risk. Technical Olympic SA is currently generating about -0.02 per unit of risk. If you would invest  134.00  in Avax SA on September 12, 2024 and sell it today you would earn a total of  17.00  from holding Avax SA or generate 12.69% return on investment over 90 days.

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

Avax SA  vs.  Technical Olympic SA

Avax SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Avax SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Avax SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Technical Olympic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Technical Olympic SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Technical Olympic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Avax SA and Technical Olympic

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

The idea behind Avax SA and Technical Olympic SA 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.

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