Correlation Between ABC Arbitrage and Akwel SA
Can any of the company-specific risk be diversified away by investing in both ABC Arbitrage and Akwel SA 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 ABC Arbitrage and Akwel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABC arbitrage SA and Akwel SA, you can compare the effects of market volatilities on ABC Arbitrage and Akwel SA 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 ABC Arbitrage with a short position of Akwel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC Arbitrage and Akwel SA.
Diversification Opportunities for ABC Arbitrage and Akwel SA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABC and Akwel is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ABC arbitrage SA and Akwel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akwel SA and ABC Arbitrage 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 ABC arbitrage SA are associated (or correlated) with Akwel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akwel SA has no effect on the direction of ABC Arbitrage i.e., ABC Arbitrage and Akwel SA go up and down completely randomly.
Pair Corralation between ABC Arbitrage and Akwel SA
Assuming the 90 days trading horizon ABC arbitrage SA is expected to generate 0.36 times more return on investment than Akwel SA. However, ABC arbitrage SA is 2.81 times less risky than Akwel SA. It trades about -0.21 of its potential returns per unit of risk. Akwel SA is currently generating about -0.12 per unit of risk. If you would invest 496.00 in ABC arbitrage SA on September 12, 2024 and sell it today you would lose (24.00) from holding ABC arbitrage SA or give up 4.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABC arbitrage SA vs. Akwel SA
Performance |
| Timeline |
| ABC arbitrage SA |
| Akwel SA |
ABC Arbitrage and Akwel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABC Arbitrage and Akwel SA
The main advantage of trading using opposite ABC Arbitrage and Akwel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC Arbitrage position performs unexpectedly, Akwel SA 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 Akwel SA will offset losses from the drop in Akwel SA's long position.| ABC Arbitrage vs. CBO Territoria SA | ABC Arbitrage vs. Rubis SCA | ABC Arbitrage vs. Nexity | ABC Arbitrage vs. Gaztransport Technigaz SAS |
| Akwel SA vs. SA Catana Group | Akwel SA vs. Verallia | Akwel SA vs. Thermador Groupe SA | Akwel SA vs. Maisons du Monde |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |