Correlation Between SOCKET MOBILE and APA
Can any of the company-specific risk be diversified away by investing in both SOCKET MOBILE and APA 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 SOCKET MOBILE and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOCKET MOBILE NEW and APA Group, you can compare the effects of market volatilities on SOCKET MOBILE and APA 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 SOCKET MOBILE with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOCKET MOBILE and APA.
Diversification Opportunities for SOCKET MOBILE and APA
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOCKET and APA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SOCKET MOBILE NEW and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group and SOCKET MOBILE 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 SOCKET MOBILE NEW are associated (or correlated) with APA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APA Group has no effect on the direction of SOCKET MOBILE i.e., SOCKET MOBILE and APA go up and down completely randomly.
Pair Corralation between SOCKET MOBILE and APA
Assuming the 90 days trading horizon SOCKET MOBILE NEW is expected to under-perform the APA. In addition to that, SOCKET MOBILE is 2.44 times more volatile than APA Group. It trades about -0.28 of its total potential returns per unit of risk. APA Group is currently generating about -0.18 per unit of volatility. If you would invest 407.00 in APA Group on November 22, 2024 and sell it today you would lose (16.00) from holding APA Group or give up 3.93% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SOCKET MOBILE NEW vs. APA Group
Performance |
Timeline |
SOCKET MOBILE NEW |
APA Group |
SOCKET MOBILE and APA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SOCKET MOBILE and APA
The main advantage of trading using opposite SOCKET MOBILE and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCKET MOBILE position performs unexpectedly, APA 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 APA will offset losses from the drop in APA's long position.SOCKET MOBILE vs. Scottish Mortgage Investment | ||
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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