Correlation Between AAC Clyde and Triboron International

Can any of the company-specific risk be diversified away by investing in both AAC Clyde and Triboron International 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 Triboron International 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 Triboron International AB, you can compare the effects of market volatilities on AAC Clyde and Triboron International 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 Triboron International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Clyde and Triboron International.

Diversification Opportunities for AAC Clyde and Triboron International

-0.62

Correlation Coefficient

AAC Clyde  Triboron International

Excellent diversification

The 3 months correlation between AAC and Triboron is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AAC Clyde Space and Triboron International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triboron International 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 Triboron International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triboron International has no effect on the direction of AAC Clyde i.e., AAC Clyde and Triboron International go up and down completely randomly.

Pair Corralation between AAC Clyde and Triboron International

Assuming the 90 days trading horizon AAC Clyde Space is expected to generate 0.76 times more return on investment than Triboron International. However, AAC Clyde Space is 1.32 times less risky than Triboron International. It trades about 0.18 of its potential returns per unit of risk. Triboron International AB is currently generating about -0.06 per unit of risk. If you would invest  4,635  in AAC Clyde Space on December 30, 2024 and sell it today you would earn a total of  2,545  from holding AAC Clyde Space or generate 54.91% return on investment over 90 days.

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

AAC Clyde Space  vs.  Triboron International AB

AAC Clyde Space

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAC Clyde Space are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, AAC Clyde unveiled solid returns over the last few months and may actually be approaching a breakup point.

Triboron International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Triboron International AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AAC Clyde and Triboron International

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

The idea behind AAC Clyde Space and Triboron International 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..