Correlation Between Allied Energy and Active Health
Can any of the company-specific risk be diversified away by investing in both Allied Energy and Active Health 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 Allied Energy and Active Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Energy and Active Health Foods, you can compare the effects of market volatilities on Allied Energy and Active Health 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 Allied Energy with a short position of Active Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Energy and Active Health.
Diversification Opportunities for Allied Energy and Active Health
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allied and Active is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Allied Energy and Active Health Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active Health Foods and Allied Energy 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 Allied Energy are associated (or correlated) with Active Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active Health Foods has no effect on the direction of Allied Energy i.e., Allied Energy and Active Health go up and down completely randomly.
Pair Corralation between Allied Energy and Active Health
If you would invest 0.62 in Allied Energy on August 29, 2024 and sell it today you would earn a total of 0.67 from holding Allied Energy or generate 108.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Allied Energy vs. Active Health Foods
Performance |
| Timeline |
| Allied Energy |
| Active Health Foods |
Allied Energy and Active Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Energy and Active Health
The main advantage of trading using opposite Allied Energy and Active Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Energy position performs unexpectedly, Active Health 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 Active Health will offset losses from the drop in Active Health's long position.| Allied Energy vs. Green Planet Bio | Allied Energy vs. Azure Holding Group | Allied Energy vs. Four Leaf Acquisition | Allied Energy vs. Opus Magnum Ameris |
| Active Health vs. Embotelladora Andina SA | Active Health vs. Signet International Holdings | Active Health vs. National Beverage Corp | Active Health vs. PT Astra International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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