Correlation Between AddTech Hub and President Automobile

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

By analyzing existing cross correlation between AddTech Hub Public and President Automobile Industries, you can compare the effects of market volatilities on AddTech Hub and President Automobile 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 AddTech Hub with a short position of President Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddTech Hub and President Automobile.

Diversification Opportunities for AddTech Hub and President Automobile

0.29

Correlation Coefficient

AddTech Hub  President Automobile

Modest diversification

The 3 months correlation between AddTech and President is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding AddTech Hub Public and President Automobile Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Automobile and AddTech Hub 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 AddTech Hub Public are associated (or correlated) with President Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Automobile has no effect on the direction of AddTech Hub i.e., AddTech Hub and President Automobile go up and down completely randomly.

Pair Corralation between AddTech Hub and President Automobile

Assuming the 90 days trading horizon AddTech Hub Public is expected to generate 1.92 times more return on investment than President Automobile. However, AddTech Hub is 1.92 times more volatile than President Automobile Industries. It trades about 0.36 of its potential returns per unit of risk. President Automobile Industries is currently generating about 0.25 per unit of risk. If you would invest  474.00  in AddTech Hub Public on October 6, 2024 and sell it today you would earn a total of  91.00  from holding AddTech Hub Public or generate 19.2% return on investment over 90 days.

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

AddTech Hub Public  vs.  President Automobile Industrie

AddTech Hub Public

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AddTech Hub Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, AddTech Hub disclosed solid returns over the last few months and may actually be approaching a breakup point.

President Automobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days President Automobile Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with AddTech Hub and President Automobile

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

The idea behind AddTech Hub Public and President Automobile Industries 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.