Correlation Between Armm and Ainos
Can any of the company-specific risk be diversified away by investing in both Armm and Ainos 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 Armm and Ainos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armm Inc and Ainos Inc, you can compare the effects of market volatilities on Armm and Ainos 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 Armm with a short position of Ainos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armm and Ainos.
Diversification Opportunities for Armm and Ainos
Pay attention - limited upside
The 3 months correlation between Armm and Ainos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Armm Inc and Ainos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainos Inc and Armm 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 Armm Inc are associated (or correlated) with Ainos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainos Inc has no effect on the direction of Armm i.e., Armm and Ainos go up and down completely randomly.
Pair Corralation between Armm and Ainos
Given the investment horizon of 90 days Armm is expected to generate 7.06 times less return on investment than Ainos. But when comparing it to its historical volatility, Armm Inc is 2.38 times less risky than Ainos. It trades about 0.04 of its potential returns per unit of risk. Ainos Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Ainos Inc on August 24, 2024 and sell it today you would lose (40.40) from holding Ainos Inc or give up 93.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 53.43% |
| Values | Daily Returns |
Armm Inc vs. Ainos Inc
Performance |
| Timeline |
| Armm Inc |
| Ainos Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Armm and Ainos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armm and Ainos
The main advantage of trading using opposite Armm and Ainos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armm position performs unexpectedly, Ainos 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 Ainos will offset losses from the drop in Ainos' long position.The idea behind Armm Inc and Ainos Inc 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.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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