Correlation Between PowerFleet and AAC Technologies
Can any of the company-specific risk be diversified away by investing in both PowerFleet and AAC Technologies 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 PowerFleet and AAC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PowerFleet and AAC Technologies Holdings, you can compare the effects of market volatilities on PowerFleet and AAC Technologies 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 PowerFleet with a short position of AAC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerFleet and AAC Technologies.
Diversification Opportunities for PowerFleet and AAC Technologies
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PowerFleet and AAC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PowerFleet and AAC Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Technologies Holdings and PowerFleet 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 PowerFleet are associated (or correlated) with AAC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Technologies Holdings has no effect on the direction of PowerFleet i.e., PowerFleet and AAC Technologies go up and down completely randomly.
Pair Corralation between PowerFleet and AAC Technologies
Given the investment horizon of 90 days PowerFleet is expected to generate 1.22 times more return on investment than AAC Technologies. However, PowerFleet is 1.22 times more volatile than AAC Technologies Holdings. It trades about 0.13 of its potential returns per unit of risk. AAC Technologies Holdings is currently generating about 0.1 per unit of risk. If you would invest 314.00 in PowerFleet on September 1, 2024 and sell it today you would earn a total of 155.00 from holding PowerFleet or generate 49.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 48.15% |
| Values | Daily Returns |
PowerFleet vs. AAC Technologies Holdings
Performance |
| Timeline |
| PowerFleet |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AAC Technologies Holdings |
PowerFleet and AAC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PowerFleet and AAC Technologies
The main advantage of trading using opposite PowerFleet and AAC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerFleet position performs unexpectedly, AAC Technologies 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 AAC Technologies will offset losses from the drop in AAC Technologies' long position.| PowerFleet vs. KVH Industries | PowerFleet vs. Comtech Telecommunications Corp | PowerFleet vs. ADTRAN Inc | PowerFleet vs. Digi International |
| AAC Technologies vs. AmpliTech Group | AAC Technologies vs. AAP Inc | AAC Technologies vs. Airgain | AAC Technologies vs. Amplitech Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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