Correlation Between AALBERTS IND and Paragon GmbH

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

By analyzing existing cross correlation between AALBERTS IND and paragon GmbH Co, you can compare the effects of market volatilities on AALBERTS IND and Paragon GmbH 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 Paragon GmbH. Check out your portfolio center. Please also check ongoing floating volatility patterns of AALBERTS IND and Paragon GmbH.

Diversification Opportunities for AALBERTS IND and Paragon GmbH

0.24

Correlation Coefficient

AALBERTS IND  Paragon GmbH

Modest diversification

The 3 months correlation between AALBERTS and Paragon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding AALBERTS IND and paragon GmbH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on paragon GmbH 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 Paragon GmbH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of paragon GmbH has no effect on the direction of AALBERTS IND i.e., AALBERTS IND and Paragon GmbH go up and down completely randomly.

Pair Corralation between AALBERTS IND and Paragon GmbH

Assuming the 90 days trading horizon AALBERTS IND is expected to generate 2.1 times less return on investment than Paragon GmbH. But when comparing it to its historical volatility, AALBERTS IND is 3.34 times less risky than Paragon GmbH. It trades about 0.04 of its potential returns per unit of risk. paragon GmbH Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  190.00  in paragon GmbH Co on October 6, 2024 and sell it today you would lose (2.00) from holding paragon GmbH Co or give up 1.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

AALBERTS IND  vs.  paragon GmbH Co

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.

paragon GmbH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days paragon GmbH Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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 AALBERTS IND and Paragon GmbH

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

The idea behind AALBERTS IND and paragon GmbH Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.