Correlation Between American Aires and KULR Technology

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

By analyzing existing cross correlation between American Aires and KULR Technology Group, you can compare the effects of market volatilities on American Aires and KULR Technology 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 American Aires with a short position of KULR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Aires and KULR Technology.

Diversification Opportunities for American Aires and KULR Technology

-0.57

Correlation Coefficient

American Aires  KULR Technology

Excellent diversification

The 3 months correlation between American and KULR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding American Aires and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group and American Aires 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 American Aires are associated (or correlated) with KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of American Aires i.e., American Aires and KULR Technology go up and down completely randomly.

Pair Corralation between American Aires and KULR Technology

Assuming the 90 days horizon American Aires is expected to under-perform the KULR Technology. But the pink sheet apears to be less risky and, when comparing its historical volatility, American Aires is 2.44 times less risky than KULR Technology. The pink sheet trades about -0.16 of its potential returns per unit of risk. The KULR Technology Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  29.00  in KULR Technology Group on September 12, 2024 and sell it today you would earn a total of  93.50  from holding KULR Technology Group or generate 322.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

American Aires  vs.  KULR Technology Group

American Aires

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Aires has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

KULR Technology Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KULR Technology Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, KULR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Aires and KULR Technology

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

The idea behind American Aires and KULR Technology Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.