Correlation Between ACS Actividades and Badger Infrastructure

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

By analyzing existing cross correlation between ACS Actividades de and Badger Infrastructure Solutions, you can compare the effects of market volatilities on ACS Actividades and Badger Infrastructure 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 ACS Actividades with a short position of Badger Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and Badger Infrastructure.

Diversification Opportunities for ACS Actividades and Badger Infrastructure

0.17

Correlation Coefficient

ACS Actividades  Badger Infrastructure

Average diversification

The 3 months correlation between ACS and Badger is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure and ACS Actividades 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 ACS Actividades de are associated (or correlated) with Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of ACS Actividades i.e., ACS Actividades and Badger Infrastructure go up and down completely randomly.

Pair Corralation between ACS Actividades and Badger Infrastructure

Assuming the 90 days horizon ACS Actividades de is expected to generate 0.25 times more return on investment than Badger Infrastructure. However, ACS Actividades de is 3.94 times less risky than Badger Infrastructure. It trades about 0.18 of its potential returns per unit of risk. Badger Infrastructure Solutions is currently generating about 0.0 per unit of risk. If you would invest  4,238  in ACS Actividades de on September 4, 2024 and sell it today you would earn a total of  295.00  from holding ACS Actividades de or generate 6.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

ACS Actividades de  vs.  Badger Infrastructure Solution

ACS Actividades de

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ACS Actividades de are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, ACS Actividades may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Badger Infrastructure

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with ACS Actividades and Badger Infrastructure

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

The idea behind ACS Actividades de and Badger Infrastructure Solutions 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.