Correlation Between AALBERTS IND and TTM Technologies

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

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

Diversification Opportunities for AALBERTS IND and TTM Technologies

0.15

Correlation Coefficient

AALBERTS IND  TTM Technologies

Average diversification

The 3 months correlation between AALBERTS and TTM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding AALBERTS IND and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies 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 TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of AALBERTS IND i.e., AALBERTS IND and TTM Technologies go up and down completely randomly.

Pair Corralation between AALBERTS IND and TTM Technologies

Assuming the 90 days trading horizon AALBERTS IND is expected to generate 0.78 times more return on investment than TTM Technologies. However, AALBERTS IND is 1.28 times less risky than TTM Technologies. It trades about 0.02 of its potential returns per unit of risk. TTM Technologies is currently generating about -0.05 per unit of risk. If you would invest  3,366  in AALBERTS IND on December 23, 2024 and sell it today you would earn a total of  36.00  from holding AALBERTS IND or generate 1.07% return on investment over 90 days.

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

AALBERTS IND  vs.  TTM Technologies

AALBERTS IND

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AALBERTS IND are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AALBERTS IND is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

TTM Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days TTM Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AALBERTS IND and TTM Technologies

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

The idea behind AALBERTS IND and TTM Technologies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.