Correlation Between Aveng and AH Vest

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

By analyzing existing cross correlation between Aveng and AH Vest Limited, you can compare the effects of market volatilities on Aveng and AH Vest 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 Aveng with a short position of AH Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aveng and AH Vest.

Diversification Opportunities for Aveng and AH Vest

0.77

Correlation Coefficient

Aveng  AH Vest

Poor diversification

The 3 months correlation between Aveng and AHL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aveng and AH Vest Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AH Vest Limited and Aveng 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 Aveng are associated (or correlated) with AH Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AH Vest Limited has no effect on the direction of Aveng i.e., Aveng and AH Vest go up and down completely randomly.

Pair Corralation between Aveng and AH Vest

Assuming the 90 days trading horizon Aveng is expected to generate 1.27 times more return on investment than AH Vest. However, Aveng is 1.27 times more volatile than AH Vest Limited. It trades about 0.0 of its potential returns per unit of risk. AH Vest Limited is currently generating about -0.01 per unit of risk. If you would invest  156,800  in Aveng on September 23, 2024 and sell it today you would lose (41,000) from holding Aveng or give up 26.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Aveng  vs.  AH Vest Limited

Aveng

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aveng are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Aveng exhibited solid returns over the last few months and may actually be approaching a breakup point.

AH Vest Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AH Vest Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AH Vest exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aveng and AH Vest

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

The idea behind Aveng and AH Vest Limited 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.