Correlation Between Associated Capital and Alvarium Tiedemann

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

By analyzing existing cross correlation between Associated Capital Group and Alvarium Tiedemann Holdings, you can compare the effects of market volatilities on Associated Capital and Alvarium Tiedemann 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 Associated Capital with a short position of Alvarium Tiedemann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Alvarium Tiedemann.

Diversification Opportunities for Associated Capital and Alvarium Tiedemann

-0.38

Correlation Coefficient

Associated Capital  Alvarium Tiedemann

Very good diversification

The 3 months correlation between Associated and Alvarium is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Alvarium Tiedemann Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvarium Tiedemann and Associated Capital 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 Associated Capital Group are associated (or correlated) with Alvarium Tiedemann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvarium Tiedemann has no effect on the direction of Associated Capital i.e., Associated Capital and Alvarium Tiedemann go up and down completely randomly.

Pair Corralation between Associated Capital and Alvarium Tiedemann

Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 0.45 times more return on investment than Alvarium Tiedemann. However, Associated Capital Group is 2.21 times less risky than Alvarium Tiedemann. It trades about 0.08 of its potential returns per unit of risk. Alvarium Tiedemann Holdings is currently generating about -0.14 per unit of risk. If you would invest  3,536  in Associated Capital Group on December 30, 2024 and sell it today you would earn a total of  295.00  from holding Associated Capital Group or generate 8.34% return on investment over 90 days.

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

Associated Capital Group  vs.  Alvarium Tiedemann Holdings

Associated Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Associated Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Alvarium Tiedemann

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvarium Tiedemann Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Associated Capital and Alvarium Tiedemann

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

The idea behind Associated Capital Group and Alvarium Tiedemann 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.