Correlation Between ADS TEC and Axion Power

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

By analyzing existing cross correlation between ADS TEC ENERGY PLC and Axion Power International, you can compare the effects of market volatilities on ADS TEC and Axion Power 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 ADS TEC with a short position of Axion Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADS TEC and Axion Power.

Diversification Opportunities for ADS TEC and Axion Power

0.0

Correlation Coefficient

ADS TEC  Axion Power

Pay attention - limited upside

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

Pair Corralation between ADS TEC and Axion Power

If you would invest  365.00  in ADS TEC ENERGY PLC on December 28, 2024 and sell it today you would lose (15.00) from holding ADS TEC ENERGY PLC or give up 4.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ADS TEC ENERGY PLC  vs.  Axion Power International

ADS TEC ENERGY

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADS TEC ENERGY PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical and fundamental indicators, ADS TEC is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Axion Power International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axion Power International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Axion Power is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ADS TEC and Axion Power

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

The idea behind ADS TEC ENERGY PLC and Axion Power International 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.