Correlation Between AAP and Nanomix

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

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

Diversification Opportunities for AAP and Nanomix

0.0

Correlation Coefficient

AAP  Nanomix

Pay attention - limited upside

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

Pair Corralation between AAP and Nanomix

If you would invest  0.01  in AAP Inc on December 2, 2024 and sell it today you would earn a total of  0.01  from holding AAP Inc or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

AAP Inc  vs.  Nanomix

AAP Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAP Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, AAP revealed solid returns over the last few months and may actually be approaching a breakup point.

Nanomix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nanomix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Nanomix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AAP and Nanomix

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

The idea behind AAP Inc and Nanomix 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.