Correlation Between Bet-at-home and Aluminumof China

Can any of the company-specific risk be diversified away by investing in both Bet-at-home and Aluminumof China 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-home and Aluminumof China 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 Aluminum of, you can compare the effects of market volatilities on Bet-at-home and Aluminumof China 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-home with a short position of Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet-at-home and Aluminumof China.

Diversification Opportunities for Bet-at-home and Aluminumof China

0.74

Correlation Coefficient

Bet-at-home  Aluminumof China

Poor diversification

The 3 months correlation between Bet-at-home and Aluminumof is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China and Bet-at-home 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 Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of Bet-at-home i.e., Bet-at-home and Aluminumof China go up and down completely randomly.

Pair Corralation between Bet-at-home and Aluminumof China

Assuming the 90 days trading horizon bet at home AG is expected to generate 0.98 times more return on investment than Aluminumof China. However, bet at home AG is 1.02 times less risky than Aluminumof China. It trades about 0.06 of its potential returns per unit of risk. Aluminum of is currently generating about 0.01 per unit of risk. If you would invest  255.00  in bet at home AG on December 2, 2024 and sell it today you would earn a total of  21.00  from holding bet at home AG or generate 8.24% return on investment over 90 days.

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

bet at home AG  vs.  Aluminum of

bet at home

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in bet at home AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Bet-at-home may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aluminumof China

Risk-Adjusted Performance

Weak

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

Pair Trading with Bet-at-home and Aluminumof China

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

The idea behind bet at home AG and Aluminum of 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.