Correlation Between Amedeo Air and Triad Group

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

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

Diversification Opportunities for Amedeo Air and Triad Group

0.52

Correlation Coefficient

Amedeo Air  Triad Group

Very weak diversification

The 3 months correlation between Amedeo and Triad is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and Triad Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Group PLC and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with Triad Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Group PLC has no effect on the direction of Amedeo Air i.e., Amedeo Air and Triad Group go up and down completely randomly.

Pair Corralation between Amedeo Air and Triad Group

Assuming the 90 days trading horizon Amedeo Air is expected to generate 1.61 times less return on investment than Triad Group. In addition to that, Amedeo Air is 1.62 times more volatile than Triad Group PLC. It trades about 0.08 of its total potential returns per unit of risk. Triad Group PLC is currently generating about 0.22 per unit of volatility. If you would invest  28,000  in Triad Group PLC on December 23, 2024 and sell it today you would earn a total of  8,000  from holding Triad Group PLC or generate 28.57% return on investment over 90 days.

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

Amedeo Air Four  vs.  Triad Group PLC

Amedeo Air Four

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Amedeo Air exhibited solid returns over the last few months and may actually be approaching a breakup point.

Triad Group PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Triad Group PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Triad Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amedeo Air and Triad Group

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

The idea behind Amedeo Air Four and Triad Group PLC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.