Correlation Between 88 Energy and Amedeo Air

Can any of the company-specific risk be diversified away by investing in both 88 Energy and Amedeo Air 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 88 Energy and Amedeo Air into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 88 Energy and Amedeo Air Four, you can compare the effects of market volatilities on 88 Energy and Amedeo Air 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 88 Energy with a short position of Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Amedeo Air.

Diversification Opportunities for 88 Energy and Amedeo Air

-0.76

Correlation Coefficient

88 Energy  Amedeo Air

Pay attention - limited upside

The 3 months correlation between 88E and Amedeo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four and 88 Energy 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 88 Energy are associated (or correlated) with Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of 88 Energy i.e., 88 Energy and Amedeo Air go up and down completely randomly.

Pair Corralation between 88 Energy and Amedeo Air

Assuming the 90 days trading horizon 88 Energy is expected to under-perform the Amedeo Air. In addition to that, 88 Energy is 6.38 times more volatile than Amedeo Air Four. It trades about -0.06 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.18 per unit of volatility. If you would invest  3,465  in Amedeo Air Four on September 19, 2024 and sell it today you would earn a total of  2,035  from holding Amedeo Air Four or generate 58.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

88 Energy  vs.  Amedeo Air Four

88 Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 88 Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Amedeo Air Four

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Amedeo Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 88 Energy and Amedeo Air

The main advantage of trading using opposite 88 Energy and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.

The idea behind 88 Energy and Amedeo Air Four 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.