Correlation Between Acm Research and Canaan

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

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

Diversification Opportunities for Acm Research and Canaan

-0.85

Correlation Coefficient

Acm Research  Canaan

Pay attention - limited upside

The 3 months correlation between Acm and Canaan is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Acm Research and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc and Acm Research 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 Acm Research are associated (or correlated) with Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of Acm Research i.e., Acm Research and Canaan go up and down completely randomly.

Pair Corralation between Acm Research and Canaan

Given the investment horizon of 90 days Acm Research is expected to generate 4.93 times less return on investment than Canaan. But when comparing it to its historical volatility, Acm Research is 1.56 times less risky than Canaan. It trades about 0.01 of its potential returns per unit of risk. Canaan Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  188.00  in Canaan Inc on October 4, 2024 and sell it today you would earn a total of  34.00  from holding Canaan Inc or generate 18.09% return on investment over 90 days.

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

Acm Research  vs.  Canaan Inc

Acm Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acm Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Canaan Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canaan Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Canaan displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acm Research and Canaan

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

The idea behind Acm Research and Canaan Inc 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.