Correlation Between A2 Milk and SSMTF

Can any of the company-specific risk be diversified away by investing in both A2 Milk and SSMTF 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 A2 Milk and SSMTF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The a2 Milk and SSMTF, you can compare the effects of market volatilities on A2 Milk and SSMTF 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 A2 Milk with a short position of SSMTF. Check out your portfolio center. Please also check ongoing floating volatility patterns of A2 Milk and SSMTF.

Diversification Opportunities for A2 Milk and SSMTF

0.0

Correlation Coefficient

A2 Milk  SSMTF

Pay attention - limited upside

The 3 months correlation between ACOPF and SSMTF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The a2 Milk and SSMTF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSMTF and A2 Milk 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 The a2 Milk are associated (or correlated) with SSMTF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSMTF has no effect on the direction of A2 Milk i.e., A2 Milk and SSMTF go up and down completely randomly.

Pair Corralation between A2 Milk and SSMTF

If you would invest  350.00  in The a2 Milk on October 21, 2024 and sell it today you would lose (5.00) from holding The a2 Milk or give up 1.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

The a2 Milk  vs.  SSMTF

a2 Milk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The a2 Milk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, A2 Milk may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SSMTF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSMTF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSMTF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with A2 Milk and SSMTF

The main advantage of trading using opposite A2 Milk and SSMTF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A2 Milk position performs unexpectedly, SSMTF 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 SSMTF will offset losses from the drop in SSMTF's long position.

The idea behind The a2 Milk and SSMTF 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.