Correlation Between AIRA Factoring and B GRIMM

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

By analyzing existing cross correlation between AIRA Factoring Public and B GRIMM POWER, you can compare the effects of market volatilities on AIRA Factoring and B GRIMM 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 AIRA Factoring with a short position of B GRIMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIRA Factoring and B GRIMM.

Diversification Opportunities for AIRA Factoring and B GRIMM

0.26

Correlation Coefficient

AIRA Factoring  B GRIMM

Modest diversification

The 3 months correlation between AIRA and BGRIM-R is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AIRA Factoring Public and B GRIMM POWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B GRIMM POWER and AIRA Factoring 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 AIRA Factoring Public are associated (or correlated) with B GRIMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B GRIMM POWER has no effect on the direction of AIRA Factoring i.e., AIRA Factoring and B GRIMM go up and down completely randomly.

Pair Corralation between AIRA Factoring and B GRIMM

Assuming the 90 days horizon AIRA Factoring Public is expected to generate 1.35 times more return on investment than B GRIMM. However, AIRA Factoring is 1.35 times more volatile than B GRIMM POWER. It trades about -0.01 of its potential returns per unit of risk. B GRIMM POWER is currently generating about -0.04 per unit of risk. If you would invest  112.00  in AIRA Factoring Public on September 23, 2024 and sell it today you would lose (44.00) from holding AIRA Factoring Public or give up 39.29% of portfolio value over 90 days.

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

AIRA Factoring Public  vs.  B GRIMM POWER

AIRA Factoring Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIRA Factoring Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

B GRIMM POWER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B GRIMM POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with AIRA Factoring and B GRIMM

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

The idea behind AIRA Factoring Public and B GRIMM POWER 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..