Correlation Between AAC Clyde and Cell Impact

Can any of the company-specific risk be diversified away by investing in both AAC Clyde and Cell Impact 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 AAC Clyde and Cell Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AAC Clyde Space and Cell Impact AB, you can compare the effects of market volatilities on AAC Clyde and Cell Impact 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 AAC Clyde with a short position of Cell Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Clyde and Cell Impact.

Diversification Opportunities for AAC Clyde and Cell Impact

-0.53

Correlation Coefficient

AAC Clyde  Cell Impact

Excellent diversification

The 3 months correlation between AAC and Cell is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AAC Clyde Space and Cell Impact AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cell Impact AB and AAC Clyde 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 AAC Clyde Space are associated (or correlated) with Cell Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cell Impact AB has no effect on the direction of AAC Clyde i.e., AAC Clyde and Cell Impact go up and down completely randomly.

Pair Corralation between AAC Clyde and Cell Impact

Assuming the 90 days trading horizon AAC Clyde Space is expected to generate 0.55 times more return on investment than Cell Impact. However, AAC Clyde Space is 1.8 times less risky than Cell Impact. It trades about 0.19 of its potential returns per unit of risk. Cell Impact AB is currently generating about -0.02 per unit of risk. If you would invest  4,650  in AAC Clyde Space on December 27, 2024 and sell it today you would earn a total of  2,750  from holding AAC Clyde Space or generate 59.14% return on investment over 90 days.

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

AAC Clyde Space  vs.  Cell Impact AB

AAC Clyde Space

Risk-Adjusted Performance

Good

Over the last 90 days AAC Clyde Space has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak fundamental indicators, AAC Clyde unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cell Impact AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cell Impact AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AAC Clyde and Cell Impact

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

The idea behind AAC Clyde Space and Cell Impact AB 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.