Correlation Between Bet At and Aedas Homes

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Can any of the company-specific risk be diversified away by investing in both Bet At and Aedas Homes 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 Bet At and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between bet at home AG and Aedas Homes SA, you can compare the effects of market volatilities on Bet At and Aedas Homes 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 Bet At with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Aedas Homes.

Diversification Opportunities for Bet At and Aedas Homes

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bet and Aedas is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and Bet At 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 bet at home AG are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of Bet At i.e., Bet At and Aedas Homes go up and down completely randomly.

Pair Corralation between Bet At and Aedas Homes

Assuming the 90 days trading horizon bet at home AG is expected to under-perform the Aedas Homes. In addition to that, Bet At is 1.28 times more volatile than Aedas Homes SA. It trades about -0.02 of its total potential returns per unit of risk. Aedas Homes SA is currently generating about 0.02 per unit of volatility. If you would invest  2,517  in Aedas Homes SA on October 26, 2024 and sell it today you would earn a total of  33.00  from holding Aedas Homes SA or generate 1.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.33%
ValuesDaily Returns

bet at home AG  vs.  Aedas Homes SA

 Performance 
       Timeline  
bet at home 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bet At is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Aedas Homes SA 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Aedas Homes SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Aedas Homes is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Bet At and Aedas Homes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bet At and Aedas Homes

The main advantage of trading using opposite Bet At and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.
The idea behind bet at home AG and Aedas Homes SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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