Correlation Between Afternext Healthtech and Acropolis Infrastructure

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

By analyzing existing cross correlation between Afternext Healthtech Acquisition and Acropolis Infrastructure Acquisition, you can compare the effects of market volatilities on Afternext Healthtech and Acropolis Infrastructure 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 Afternext Healthtech with a short position of Acropolis Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afternext Healthtech and Acropolis Infrastructure.

Diversification Opportunities for Afternext Healthtech and Acropolis Infrastructure

0.12

Correlation Coefficient

Afternext Healthtech  Acropolis Infrastructure

Average diversification

The 3 months correlation between Afternext and Acropolis is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Afternext Healthtech Acquisiti and Acropolis Infrastructure Acqui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acropolis Infrastructure and Afternext Healthtech 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 Afternext Healthtech Acquisition are associated (or correlated) with Acropolis Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acropolis Infrastructure has no effect on the direction of Afternext Healthtech i.e., Afternext Healthtech and Acropolis Infrastructure go up and down completely randomly.

Pair Corralation between Afternext Healthtech and Acropolis Infrastructure

Given the investment horizon of 90 days Afternext Healthtech Acquisition is expected to generate 0.31 times more return on investment than Acropolis Infrastructure. However, Afternext Healthtech Acquisition is 3.19 times less risky than Acropolis Infrastructure. It trades about 0.19 of its potential returns per unit of risk. Acropolis Infrastructure Acquisition is currently generating about 0.03 per unit of risk. If you would invest  1,004  in Afternext Healthtech Acquisition on September 28, 2024 and sell it today you would earn a total of  35.00  from holding Afternext Healthtech Acquisition or generate 3.49% return on investment over 90 days.

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

Afternext Healthtech Acquisiti  vs.  Acropolis Infrastructure Acqui

Afternext Healthtech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Acropolis Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acropolis Infrastructure Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Acropolis Infrastructure is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Afternext Healthtech and Acropolis Infrastructure

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

The idea behind Afternext Healthtech Acquisition and Acropolis Infrastructure Acquisition 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 CEOs Directory module to screen CEOs from public companies around the world.