Correlation Between Active Health and Atlantic Energy
Can any of the company-specific risk be diversified away by investing in both Active Health and Atlantic Energy 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 Active Health and Atlantic Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Active Health Foods and Atlantic Energy Solutions, you can compare the effects of market volatilities on Active Health and Atlantic Energy 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 Active Health with a short position of Atlantic Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Active Health and Atlantic Energy.
Diversification Opportunities for Active Health and Atlantic Energy
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Active and Atlantic is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Active Health Foods and Atlantic Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Energy Solutions and Active Health 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 Active Health Foods are associated (or correlated) with Atlantic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Energy Solutions has no effect on the direction of Active Health i.e., Active Health and Atlantic Energy go up and down completely randomly.
Pair Corralation between Active Health and Atlantic Energy
Given the investment horizon of 90 days Active Health Foods is expected to generate 2.29 times more return on investment than Atlantic Energy. However, Active Health is 2.29 times more volatile than Atlantic Energy Solutions. It trades about 0.07 of its potential returns per unit of risk. Atlantic Energy Solutions is currently generating about 0.07 per unit of risk. If you would invest 0.01 in Active Health Foods on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Active Health Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Active Health Foods vs. Atlantic Energy Solutions
Performance |
| Timeline |
| Active Health Foods |
| Atlantic Energy Solutions |
Active Health and Atlantic Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Active Health and Atlantic Energy
The main advantage of trading using opposite Active Health and Atlantic Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Active Health position performs unexpectedly, Atlantic Energy 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 Atlantic Energy will offset losses from the drop in Atlantic Energy's long position.| Active Health vs. Ventana Biotech | Active Health vs. Gold Ent Group | Active Health vs. Profitable Develop | Active Health vs. American Leisure Holdings |
| Atlantic Energy vs. Simulated Environmen | Atlantic Energy vs. Mundus Group | Atlantic Energy vs. Xtra Energy Corp |
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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