Correlation Between MicroCloud Hologram and ADTRAN

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

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

Diversification Opportunities for MicroCloud Hologram and ADTRAN

-0.48

Correlation Coefficient

MicroCloud Hologram  ADTRAN

Very good diversification

The 3 months correlation between MicroCloud and ADTRAN is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MicroCloud Hologram and ADTRAN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Inc and MicroCloud Hologram 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 MicroCloud Hologram are associated (or correlated) with ADTRAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Inc has no effect on the direction of MicroCloud Hologram i.e., MicroCloud Hologram and ADTRAN go up and down completely randomly.

Pair Corralation between MicroCloud Hologram and ADTRAN

Given the investment horizon of 90 days MicroCloud Hologram is expected to generate 2.1 times less return on investment than ADTRAN. In addition to that, MicroCloud Hologram is 6.98 times more volatile than ADTRAN Inc. It trades about 0.02 of its total potential returns per unit of risk. ADTRAN Inc is currently generating about 0.25 per unit of volatility. If you would invest  611.00  in ADTRAN Inc on October 23, 2024 and sell it today you would earn a total of  408.00  from holding ADTRAN Inc or generate 66.78% return on investment over 90 days.

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

MicroCloud Hologram  vs.  ADTRAN Inc

MicroCloud Hologram

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MicroCloud Hologram are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, MicroCloud Hologram displayed solid returns over the last few months and may actually be approaching a breakup point.

ADTRAN Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ADTRAN Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ADTRAN displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MicroCloud Hologram and ADTRAN

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

The idea behind MicroCloud Hologram and ADTRAN Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.