Correlation Between Alliance Fiber and Actel Corp
Can any of the company-specific risk be diversified away by investing in both Alliance Fiber and Actel Corp 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 Alliance Fiber and Actel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Fiber Optic and Actel Corp, you can compare the effects of market volatilities on Alliance Fiber and Actel Corp 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 Alliance Fiber with a short position of Actel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Fiber and Actel Corp.
Diversification Opportunities for Alliance Fiber and Actel Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alliance and Actel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Fiber Optic and Actel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actel Corp and Alliance Fiber 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 Alliance Fiber Optic are associated (or correlated) with Actel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actel Corp has no effect on the direction of Alliance Fiber i.e., Alliance Fiber and Actel Corp go up and down completely randomly.
Pair Corralation between Alliance Fiber and Actel Corp
If you would invest (100.00) in Actel Corp on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Actel Corp or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Alliance Fiber Optic vs. Actel Corp
Performance |
Timeline |
Alliance Fiber Optic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Actel Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alliance Fiber and Actel Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alliance Fiber and Actel Corp
The main advantage of trading using opposite Alliance Fiber and Actel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Fiber position performs unexpectedly, Actel Corp 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 Actel Corp will offset losses from the drop in Actel Corp's long position.Alliance Fiber vs. Sunlands Technology Group | Alliance Fiber vs. Youdao Inc | Alliance Fiber vs. Universal Technical Institute | Alliance Fiber vs. Mid Atlantic Home Health |
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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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