Correlation Between Aeris Indstria and HALI34

Can any of the company-specific risk be diversified away by investing in both Aeris Indstria and HALI34 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 Aeris Indstria and HALI34 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeris Indstria e and HALI34, you can compare the effects of market volatilities on Aeris Indstria and HALI34 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 Aeris Indstria with a short position of HALI34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Indstria and HALI34.

Diversification Opportunities for Aeris Indstria and HALI34

0.02

Correlation Coefficient

Aeris Indstria  HALI34

Significant diversification

The 3 months correlation between Aeris and HALI34 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Indstria e and HALI34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALI34 and Aeris Indstria 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 Aeris Indstria e are associated (or correlated) with HALI34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALI34 has no effect on the direction of Aeris Indstria i.e., Aeris Indstria and HALI34 go up and down completely randomly.

Pair Corralation between Aeris Indstria and HALI34

Assuming the 90 days trading horizon Aeris Indstria e is expected to generate 3.24 times more return on investment than HALI34. However, Aeris Indstria is 3.24 times more volatile than HALI34. It trades about 0.08 of its potential returns per unit of risk. HALI34 is currently generating about 0.04 per unit of risk. If you would invest  601.00  in Aeris Indstria e on September 26, 2024 and sell it today you would earn a total of  185.00  from holding Aeris Indstria e or generate 30.78% return on investment over 90 days.

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

Aeris Indstria e  vs.  HALI34

Aeris Indstria e

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aeris Indstria e are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aeris Indstria unveiled solid returns over the last few months and may actually be approaching a breakup point.

HALI34

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HALI34 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, HALI34 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aeris Indstria and HALI34

The main advantage of trading using opposite Aeris Indstria and HALI34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Indstria position performs unexpectedly, HALI34 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 HALI34 will offset losses from the drop in HALI34's long position.

The idea behind Aeris Indstria e and HALI34 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.