Correlation Between AALBERTS IND and Loews Corp

Can any of the company-specific risk be diversified away by investing in both AALBERTS IND and Loews Corp 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 AALBERTS IND and Loews Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AALBERTS IND and Loews Corp, you can compare the effects of market volatilities on AALBERTS IND and Loews Corp 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 AALBERTS IND with a short position of Loews Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AALBERTS IND and Loews Corp.

Diversification Opportunities for AALBERTS IND and Loews Corp

0.36

Correlation Coefficient

AALBERTS IND  Loews Corp

Weak diversification

The 3 months correlation between AALBERTS and Loews is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding AALBERTS IND and Loews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loews Corp and AALBERTS IND 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 AALBERTS IND are associated (or correlated) with Loews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews Corp has no effect on the direction of AALBERTS IND i.e., AALBERTS IND and Loews Corp go up and down completely randomly.

Pair Corralation between AALBERTS IND and Loews Corp

Assuming the 90 days trading horizon AALBERTS IND is expected to generate 10.4 times less return on investment than Loews Corp. But when comparing it to its historical volatility, AALBERTS IND is 1.13 times less risky than Loews Corp. It trades about 0.02 of its potential returns per unit of risk. Loews Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,950  in Loews Corp on October 22, 2024 and sell it today you would earn a total of  350.00  from holding Loews Corp or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

AALBERTS IND  vs.  Loews Corp

AALBERTS IND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AALBERTS IND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AALBERTS IND is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Loews Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Loews Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Loews Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AALBERTS IND and Loews Corp

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

The idea behind AALBERTS IND and Loews Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.