Correlation Between AAC Clyde and Alcadon Group
Can any of the company-specific risk be diversified away by investing in both AAC Clyde and Alcadon Group 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 Clyde and Alcadon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC Clyde Space and Alcadon Group AB, you can compare the effects of market volatilities on AAC Clyde and Alcadon Group 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 Clyde with a short position of Alcadon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Clyde and Alcadon Group.
Diversification Opportunities for AAC Clyde and Alcadon Group
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AAC and Alcadon is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding AAC Clyde Space and Alcadon Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcadon Group AB and AAC Clyde 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 Clyde Space are associated (or correlated) with Alcadon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcadon Group AB has no effect on the direction of AAC Clyde i.e., AAC Clyde and Alcadon Group go up and down completely randomly.
Pair Corralation between AAC Clyde and Alcadon Group
Assuming the 90 days trading horizon AAC Clyde Space is expected to generate 2.74 times more return on investment than Alcadon Group. However, AAC Clyde is 2.74 times more volatile than Alcadon Group AB. It trades about 0.22 of its potential returns per unit of risk. Alcadon Group AB is currently generating about -0.16 per unit of risk. If you would invest 3,540 in AAC Clyde Space on August 30, 2024 and sell it today you would earn a total of 1,030 from holding AAC Clyde Space or generate 29.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC Clyde Space vs. Alcadon Group AB
Performance |
| Timeline |
| AAC Clyde Space |
| Alcadon Group AB |
AAC Clyde and Alcadon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC Clyde and Alcadon Group
The main advantage of trading using opposite AAC Clyde and Alcadon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC Clyde position performs unexpectedly, Alcadon Group 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 Alcadon Group will offset losses from the drop in Alcadon Group's long position.| AAC Clyde vs. GomSpace Group AB | AAC Clyde vs. Eolus Vind AB | AAC Clyde vs. Fingerprint Cards AB | AAC Clyde vs. SaltX Technology Holding |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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