Correlation Between AAC Clyde and Cint Group

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Can any of the company-specific risk be diversified away by investing in both AAC Clyde and Cint 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 Cint 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 Cint Group AB, you can compare the effects of market volatilities on AAC Clyde and Cint 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 Cint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Clyde and Cint Group.

Diversification Opportunities for AAC Clyde and Cint Group

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between AAC and Cint is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AAC Clyde Space and Cint Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cint 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 Cint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cint Group AB has no effect on the direction of AAC Clyde i.e., AAC Clyde and Cint Group go up and down completely randomly.

Pair Corralation between AAC Clyde and Cint Group

Assuming the 90 days trading horizon AAC Clyde Space is expected to generate 2.61 times more return on investment than Cint Group. However, AAC Clyde is 2.61 times more volatile than Cint Group AB. It trades about 0.27 of its potential returns per unit of risk. Cint Group AB is currently generating about -0.06 per unit of risk. If you would invest  3,345  in AAC Clyde Space on August 26, 2024 and sell it today you would earn a total of  1,260  from holding AAC Clyde Space or generate 37.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

AAC Clyde Space  vs.  Cint Group AB

 Performance 
       Timeline  
AAC Clyde Space 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AAC Clyde Space are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, AAC Clyde unveiled solid returns over the last few months and may actually be approaching a breakup point.
Cint Group AB 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Cint Group AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cint Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

AAC Clyde and Cint Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AAC Clyde and Cint Group

The main advantage of trading using opposite AAC Clyde and Cint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC Clyde position performs unexpectedly, Cint 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 Cint Group will offset losses from the drop in Cint Group's long position.
The idea behind AAC Clyde Space and Cint Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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