Correlation Between Alpha Pro and Aspen Aerogels
Can any of the company-specific risk be diversified away by investing in both Alpha Pro and Aspen Aerogels 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 Alpha Pro and Aspen Aerogels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Pro Tech and Aspen Aerogels, you can compare the effects of market volatilities on Alpha Pro and Aspen Aerogels 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 Alpha Pro with a short position of Aspen Aerogels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Pro and Aspen Aerogels.
Diversification Opportunities for Alpha Pro and Aspen Aerogels
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alpha and Aspen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Pro Tech and Aspen Aerogels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Aerogels and Alpha Pro 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 Alpha Pro Tech are associated (or correlated) with Aspen Aerogels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Aerogels has no effect on the direction of Alpha Pro i.e., Alpha Pro and Aspen Aerogels go up and down completely randomly.
Pair Corralation between Alpha Pro and Aspen Aerogels
Considering the 90-day investment horizon Alpha Pro Tech is expected to generate 0.52 times more return on investment than Aspen Aerogels. However, Alpha Pro Tech is 1.92 times less risky than Aspen Aerogels. It trades about -0.13 of its potential returns per unit of risk. Aspen Aerogels is currently generating about -0.27 per unit of risk. If you would invest 567.00 in Alpha Pro Tech on August 30, 2024 and sell it today you would lose (33.00) from holding Alpha Pro Tech or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Pro Tech vs. Aspen Aerogels
Performance |
| Timeline |
| Alpha Pro Tech |
| Aspen Aerogels |
Alpha Pro and Aspen Aerogels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Pro and Aspen Aerogels
The main advantage of trading using opposite Alpha Pro and Aspen Aerogels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Pro position performs unexpectedly, Aspen Aerogels 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 Aspen Aerogels will offset losses from the drop in Aspen Aerogels' long position.| Alpha Pro vs. Quanex Building Products | Alpha Pro vs. Janus International Group | Alpha Pro vs. Azek Company | Alpha Pro vs. Armstrong World Industries |
| Aspen Aerogels vs. Apyx Medical | Aspen Aerogels vs. Century Communities | Aspen Aerogels vs. Ardmore Shpng | Aspen Aerogels vs. American Assets Trust |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |