Correlation Between Ares Acquisition and Afternext Healthtech

Can any of the company-specific risk be diversified away by investing in both Ares Acquisition and Afternext Healthtech 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 Ares Acquisition and Afternext Healthtech into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Ares Acquisition and Afternext Healthtech

0.0

Correlation Coefficient

Ares Acquisition  Afternext Healthtech

Pay attention - limited upside

The 3 months correlation between Ares and Afternext is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ares Acquisition and Afternext Healthtech Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afternext Healthtech and Ares Acquisition 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 Ares Acquisition are associated (or correlated) with Afternext Healthtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afternext Healthtech has no effect on the direction of Ares Acquisition i.e., Ares Acquisition and Afternext Healthtech go up and down completely randomly.

Pair Corralation between Ares Acquisition and Afternext Healthtech

If you would invest  1,086  in Ares Acquisition on October 9, 2024 and sell it today you would earn a total of  14.00  from holding Ares Acquisition or generate 1.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Ares Acquisition  vs.  Afternext Healthtech Acquisiti

Ares Acquisition

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ares Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Ares Acquisition is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Afternext Healthtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Afternext Healthtech Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Afternext Healthtech is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ares Acquisition and Afternext Healthtech

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

The idea behind Ares Acquisition and Afternext Healthtech Acquisition 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.