Correlation Between Aedas Homes and Bet At

Can any of the company-specific risk be diversified away by investing in both Aedas Homes and Bet At 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 Aedas Homes and Bet At into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aedas Homes SA and bet at home AG, you can compare the effects of market volatilities on Aedas Homes and Bet At 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 Aedas Homes with a short position of Bet At. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Bet At.

Diversification Opportunities for Aedas Homes and Bet At

0.41

Correlation Coefficient

Aedas Homes  Bet At

Very weak diversification

The 3 months correlation between Aedas and Bet is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with Bet At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of Aedas Homes i.e., Aedas Homes and Bet At go up and down completely randomly.

Pair Corralation between Aedas Homes and Bet At

Assuming the 90 days horizon Aedas Homes is expected to generate 6.01 times less return on investment than Bet At. But when comparing it to its historical volatility, Aedas Homes SA is 1.35 times less risky than Bet At. It trades about 0.06 of its potential returns per unit of risk. bet at home AG is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  250.00  in bet at home AG on October 26, 2024 and sell it today you would earn a total of  39.00  from holding bet at home AG or generate 15.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Aedas Homes SA  vs.  bet at home AG

Aedas Homes SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aedas Homes SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Aedas Homes is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bet At is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aedas Homes and Bet At

The main advantage of trading using opposite Aedas Homes and Bet At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, Bet At 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 Bet At will offset losses from the drop in Bet At's long position.

The idea behind Aedas Homes SA and bet at home AG 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.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.