Correlation Between Acri Capital and Azure Holding
Can any of the company-specific risk be diversified away by investing in both Acri Capital and Azure Holding 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 Acri Capital and Azure Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acri Capital Acquisition and Azure Holding Group, you can compare the effects of market volatilities on Acri Capital and Azure Holding 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 Acri Capital with a short position of Azure Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acri Capital and Azure Holding.
Diversification Opportunities for Acri Capital and Azure Holding
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acri and Azure is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Acri Capital Acquisition and Azure Holding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Holding Group and Acri Capital 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 Acri Capital Acquisition are associated (or correlated) with Azure Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Holding Group has no effect on the direction of Acri Capital i.e., Acri Capital and Azure Holding go up and down completely randomly.
Pair Corralation between Acri Capital and Azure Holding
Given the investment horizon of 90 days Acri Capital is expected to generate 249.24 times less return on investment than Azure Holding. But when comparing it to its historical volatility, Acri Capital Acquisition is 34.01 times less risky than Azure Holding. It trades about 0.01 of its potential returns per unit of risk. Azure Holding Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.30 in Azure Holding Group on September 2, 2024 and sell it today you would earn a total of 23.70 from holding Azure Holding Group or generate 7900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.17% |
| Values | Daily Returns |
Acri Capital Acquisition vs. Azure Holding Group
Performance |
| Timeline |
| Acri Capital Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Azure Holding Group |
Acri Capital and Azure Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acri Capital and Azure Holding
The main advantage of trading using opposite Acri Capital and Azure Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acri Capital position performs unexpectedly, Azure Holding 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 Azure Holding will offset losses from the drop in Azure Holding's long position.The idea behind Acri Capital Acquisition and Azure Holding Group 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.| Azure Holding vs. Porsche Automobile Holding | Azure Holding vs. Ferrari NV | Azure Holding vs. Toyota Motor | Azure Holding vs. General Motors |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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