Correlation Between AAC TECHNOLOGHLDGADR and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Amadeus IT 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 AAC TECHNOLOGHLDGADR and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Amadeus IT Group, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Amadeus IT 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 AAC TECHNOLOGHLDGADR with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Amadeus IT.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Amadeus IT
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AAC and Amadeus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Amadeus IT go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Amadeus IT
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 3.17 times more return on investment than Amadeus IT. However, AAC TECHNOLOGHLDGADR is 3.17 times more volatile than Amadeus IT Group. It trades about 0.36 of its potential returns per unit of risk. Amadeus IT Group is currently generating about 0.16 per unit of risk. If you would invest 358.00 in AAC TECHNOLOGHLDGADR on September 14, 2024 and sell it today you would earn a total of 102.00 from holding AAC TECHNOLOGHLDGADR or generate 28.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Amadeus IT Group
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Amadeus IT Group |
AAC TECHNOLOGHLDGADR and Amadeus IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Amadeus IT
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.| AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Nokia | AAC TECHNOLOGHLDGADR vs. Superior Plus Corp | AAC TECHNOLOGHLDGADR vs. SIVERS SEMICONDUCTORS AB |
| Amadeus IT vs. AAC TECHNOLOGHLDGADR | Amadeus IT vs. Lion Biotechnologies | Amadeus IT vs. Infrastrutture Wireless Italiane | Amadeus IT vs. CENTURIA OFFICE REIT |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance |