Correlation Between Computer Age and Akme Fintrade

Can any of the company-specific risk be diversified away by investing in both Computer Age and Akme Fintrade 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 Computer Age and Akme Fintrade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Computer Age Management and Akme Fintrade India, you can compare the effects of market volatilities on Computer Age and Akme Fintrade 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 Computer Age with a short position of Akme Fintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Age and Akme Fintrade.

Diversification Opportunities for Computer Age and Akme Fintrade

0.38

Correlation Coefficient

Computer Age  Akme Fintrade

Weak diversification

The 3 months correlation between Computer and Akme is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Computer Age Management and Akme Fintrade India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akme Fintrade India and Computer Age 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 Computer Age Management are associated (or correlated) with Akme Fintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akme Fintrade India has no effect on the direction of Computer Age i.e., Computer Age and Akme Fintrade go up and down completely randomly.

Pair Corralation between Computer Age and Akme Fintrade

Assuming the 90 days trading horizon Computer Age Management is expected to under-perform the Akme Fintrade. But the stock apears to be less risky and, when comparing its historical volatility, Computer Age Management is 1.8 times less risky than Akme Fintrade. The stock trades about -0.33 of its potential returns per unit of risk. The Akme Fintrade India is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  9,393  in Akme Fintrade India on October 26, 2024 and sell it today you would lose (843.00) from holding Akme Fintrade India or give up 8.97% of portfolio value over 90 days.

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

Computer Age Management  vs.  Akme Fintrade India

Computer Age Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Computer Age Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Computer Age is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Akme Fintrade India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akme Fintrade India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Akme Fintrade is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Computer Age and Akme Fintrade

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

The idea behind Computer Age Management and Akme Fintrade India 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.