Correlation Between Aroundtown and Adler Group
Can any of the company-specific risk be diversified away by investing in both Aroundtown and Adler 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 Aroundtown and Adler Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aroundtown SA and Adler Group SA, you can compare the effects of market volatilities on Aroundtown and Adler 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 Aroundtown with a short position of Adler Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aroundtown and Adler Group.
Diversification Opportunities for Aroundtown and Adler Group
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aroundtown and Adler is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aroundtown SA and Adler Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adler Group SA and Aroundtown 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 Aroundtown SA are associated (or correlated) with Adler Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adler Group SA has no effect on the direction of Aroundtown i.e., Aroundtown and Adler Group go up and down completely randomly.
Pair Corralation between Aroundtown and Adler Group
Assuming the 90 days horizon Aroundtown SA is expected to generate 0.89 times more return on investment than Adler Group. However, Aroundtown SA is 1.13 times less risky than Adler Group. It trades about 0.08 of its potential returns per unit of risk. Adler Group SA is currently generating about -0.03 per unit of risk. If you would invest 126.00 in Aroundtown SA on August 29, 2024 and sell it today you would earn a total of 169.00 from holding Aroundtown SA or generate 134.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aroundtown SA vs. Adler Group SA
Performance |
| Timeline |
| Aroundtown SA |
| Adler Group SA |
Aroundtown and Adler Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aroundtown and Adler Group
The main advantage of trading using opposite Aroundtown and Adler Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aroundtown position performs unexpectedly, Adler 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 Adler Group will offset losses from the drop in Adler Group's long position.| Aroundtown vs. IRSA Inversiones Y | Aroundtown vs. Anywhere Real Estate | Aroundtown vs. Newmark Group | Aroundtown vs. New York City |
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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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