Correlation Between Industrial Engineering and Act Financial

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

By analyzing existing cross correlation between Industrial Engineering Projects and Act Financial, you can compare the effects of market volatilities on Industrial Engineering and Act Financial 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 Industrial Engineering with a short position of Act Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Engineering and Act Financial.

Diversification Opportunities for Industrial Engineering and Act Financial

0.82

Correlation Coefficient

Industrial Engineering  Act Financial

Very poor diversification

The 3 months correlation between Industrial and Act is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Engineering Project and Act Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Act Financial and Industrial Engineering 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 Industrial Engineering Projects are associated (or correlated) with Act Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Act Financial has no effect on the direction of Industrial Engineering i.e., Industrial Engineering and Act Financial go up and down completely randomly.

Pair Corralation between Industrial Engineering and Act Financial

Assuming the 90 days trading horizon Industrial Engineering is expected to generate 2.22 times less return on investment than Act Financial. But when comparing it to its historical volatility, Industrial Engineering Projects is 1.41 times less risky than Act Financial. It trades about 0.01 of its potential returns per unit of risk. Act Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  332.00  in Act Financial on September 15, 2024 and sell it today you would earn a total of  1.00  from holding Act Financial or generate 0.3% return on investment over 90 days.

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

Industrial Engineering Project  vs.  Act Financial

Industrial Engineering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Industrial Engineering Projects has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Industrial Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Act Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Act Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Act Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Industrial Engineering and Act Financial

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

The idea behind Industrial Engineering Projects and Act Financial 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.