Correlation Between PowerFleet and AAP
Can any of the company-specific risk be diversified away by investing in both PowerFleet and AAP 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 AAP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PowerFleet and AAP Inc, you can compare the effects of market volatilities on PowerFleet and AAP 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 AAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerFleet and AAP.
Diversification Opportunities for PowerFleet and AAP
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PowerFleet and AAP is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PowerFleet and AAP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAP Inc 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 AAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAP Inc has no effect on the direction of PowerFleet i.e., PowerFleet and AAP go up and down completely randomly.
Pair Corralation between PowerFleet and AAP
If you would invest 0.02 in AAP Inc on August 28, 2024 and sell it today you would earn a total of 0.00 from holding AAP Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
PowerFleet vs. AAP Inc
Performance |
| Timeline |
| PowerFleet |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AAP Inc |
PowerFleet and AAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PowerFleet and AAP
The main advantage of trading using opposite PowerFleet and AAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerFleet position performs unexpectedly, AAP 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 AAP will offset losses from the drop in AAP's long position.| PowerFleet vs. KVH Industries | PowerFleet vs. Comtech Telecommunications Corp | PowerFleet vs. ADTRAN Inc | PowerFleet vs. Digi International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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