Correlation Between Trend Micro and Akamai Technologies
Can any of the company-specific risk be diversified away by investing in both Trend Micro and Akamai Technologies 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 Trend Micro and Akamai Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trend Micro ADR and Akamai Technologies, you can compare the effects of market volatilities on Trend Micro and Akamai Technologies 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 Trend Micro with a short position of Akamai Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trend Micro and Akamai Technologies.
Diversification Opportunities for Trend Micro and Akamai Technologies
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trend and Akamai is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Trend Micro ADR and Akamai Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies and Trend Micro 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 Trend Micro ADR are associated (or correlated) with Akamai Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies has no effect on the direction of Trend Micro i.e., Trend Micro and Akamai Technologies go up and down completely randomly.
Pair Corralation between Trend Micro and Akamai Technologies
Assuming the 90 days horizon Trend Micro ADR is expected to generate 0.89 times more return on investment than Akamai Technologies. However, Trend Micro ADR is 1.12 times less risky than Akamai Technologies. It trades about 0.18 of its potential returns per unit of risk. Akamai Technologies is currently generating about -0.07 per unit of risk. If you would invest 5,630 in Trend Micro ADR on December 5, 2024 and sell it today you would earn a total of 1,788 from holding Trend Micro ADR or generate 31.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Trend Micro ADR vs. Akamai Technologies
Performance |
Timeline |
Trend Micro ADR |
Akamai Technologies |
Trend Micro and Akamai Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trend Micro and Akamai Technologies
The main advantage of trading using opposite Trend Micro and Akamai Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trend Micro position performs unexpectedly, Akamai Technologies 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 Akamai Technologies will offset losses from the drop in Akamai Technologies' long position.Trend Micro vs. Synchronoss Technologies | Trend Micro vs. SolarWinds Corp | Trend Micro vs. Evertec | Trend Micro vs. CSG Systems International |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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