Correlation Between Advanced Braking and Saferoads Holdings

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

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

Diversification Opportunities for Advanced Braking and Saferoads Holdings

0.0

Correlation Coefficient

Advanced Braking  Saferoads Holdings

Pay attention - limited upside

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

Pair Corralation between Advanced Braking and Saferoads Holdings

Assuming the 90 days trading horizon Advanced Braking Technology is expected to generate 1.33 times more return on investment than Saferoads Holdings. However, Advanced Braking is 1.33 times more volatile than Saferoads Holdings. It trades about 0.06 of its potential returns per unit of risk. Saferoads Holdings is currently generating about -0.08 per unit of risk. If you would invest  4.00  in Advanced Braking Technology on September 20, 2024 and sell it today you would earn a total of  4.10  from holding Advanced Braking Technology or generate 102.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Advanced Braking Technology  vs.  Saferoads Holdings

Advanced Braking Tec

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Braking Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Advanced Braking unveiled solid returns over the last few months and may actually be approaching a breakup point.

Saferoads Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saferoads Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Saferoads Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Advanced Braking and Saferoads Holdings

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

The idea behind Advanced Braking Technology and Saferoads Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..