Correlation Between Azure Holding and Allied Energy
Can any of the company-specific risk be diversified away by investing in both Azure Holding and Allied 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 Azure Holding and Allied Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azure Holding Group and Allied Energy, you can compare the effects of market volatilities on Azure Holding and Allied 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 Azure Holding with a short position of Allied Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Holding and Allied Energy.
Diversification Opportunities for Azure Holding and Allied Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Azure and Allied is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Allied Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Energy and Azure Holding 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 Azure Holding Group are associated (or correlated) with Allied Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Energy has no effect on the direction of Azure Holding i.e., Azure Holding and Allied Energy go up and down completely randomly.
Pair Corralation between Azure Holding and Allied Energy
Given the investment horizon of 90 days Azure Holding Group is expected to generate 2.01 times more return on investment than Allied Energy. However, Azure Holding is 2.01 times more volatile than Allied Energy. It trades about 0.15 of its potential returns per unit of risk. Allied Energy is currently generating about 0.11 per unit of risk. If you would invest 21.00 in Azure Holding Group on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Azure Holding Group or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azure Holding Group vs. Allied Energy
Performance |
| Timeline |
| Azure Holding Group |
| Allied Energy |
Azure Holding and Allied Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azure Holding and Allied Energy
The main advantage of trading using opposite Azure Holding and Allied Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azure Holding position performs unexpectedly, Allied 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 Allied Energy will offset losses from the drop in Allied Energy's long position.| Azure Holding vs. Alsea SAB de | Azure Holding vs. Marstons PLC | Azure Holding vs. Bagger Daves Burger | Azure Holding vs. Marstons PLC |
| Allied Energy vs. Green Planet Bio | Allied Energy vs. Azure Holding Group | Allied Energy vs. Four Leaf Acquisition | Allied Energy vs. Opus Magnum Ameris |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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