Correlation Between All American and Sangui Biotech

Can any of the company-specific risk be diversified away by investing in both All American and Sangui Biotech 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 All American and Sangui Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between All American Gld and Sangui Biotech International, you can compare the effects of market volatilities on All American and Sangui Biotech 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 All American with a short position of Sangui Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of All American and Sangui Biotech.

Diversification Opportunities for All American and Sangui Biotech

-0.79

Correlation Coefficient

All American  Sangui Biotech

Pay attention - limited upside

The 3 months correlation between All and Sangui is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding All American Gld and Sangui Biotech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangui Biotech Inter and All American 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 All American Gld are associated (or correlated) with Sangui Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangui Biotech Inter has no effect on the direction of All American i.e., All American and Sangui Biotech go up and down completely randomly.

Pair Corralation between All American and Sangui Biotech

Given the investment horizon of 90 days All American Gld is expected to generate 0.79 times more return on investment than Sangui Biotech. However, All American Gld is 1.27 times less risky than Sangui Biotech. It trades about 0.13 of its potential returns per unit of risk. Sangui Biotech International is currently generating about -0.22 per unit of risk. If you would invest  0.10  in All American Gld on October 26, 2024 and sell it today you would earn a total of  0.02  from holding All American Gld or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

All American Gld  vs.  Sangui Biotech International

All American Gld

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in All American Gld are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, All American exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sangui Biotech Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sangui Biotech International 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 fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with All American and Sangui Biotech

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

The idea behind All American Gld and Sangui Biotech International 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 Commodity Directory module to find actively traded commodities issued by global exchanges.