Correlation Between Azure Holding and New Generation
Can any of the company-specific risk be diversified away by investing in both Azure Holding and New Generation 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 Azure Holding and New Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azure Holding Group and New Generation Consumer, you can compare the effects of market volatilities on Azure Holding and New Generation 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 Azure Holding with a short position of New Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Holding and New Generation.
Diversification Opportunities for Azure Holding and New Generation
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Azure and New is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer and Azure Holding 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 Azure Holding Group are associated (or correlated) with New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of Azure Holding i.e., Azure Holding and New Generation go up and down completely randomly.
Pair Corralation between Azure Holding and New Generation
Given the investment horizon of 90 days Azure Holding Group is expected to generate 1.04 times more return on investment than New Generation. However, Azure Holding is 1.04 times more volatile than New Generation Consumer. It trades about 0.1 of its potential returns per unit of risk. New Generation Consumer is currently generating about 0.01 per unit of risk. If you would invest 13.00 in Azure Holding Group on December 26, 2024 and sell it today you would earn a total of 3.00 from holding Azure Holding Group or generate 23.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Azure Holding Group vs. New Generation Consumer
Performance |
Timeline |
Azure Holding Group |
New Generation Consumer |
Azure Holding and New Generation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Azure Holding and New Generation
The main advantage of trading using opposite Azure Holding and New Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azure Holding position performs unexpectedly, New Generation 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 New Generation will offset losses from the drop in New Generation's long position.Azure Holding vs. Western Midstream Partners | Azure Holding vs. JD Sports Fashion | Azure Holding vs. Enel Chile SA | Azure Holding vs. NiSource |
New Generation vs. Xtra Energy Corp | New Generation vs. Arsenal Digital Holdings | New Generation vs. UHF Logistics Group | New Generation vs. XCana Petroleum |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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