Correlation Between Ameriguard Security and Absolute Health

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

By analyzing existing cross correlation between Ameriguard Security Services and Absolute Health and, you can compare the effects of market volatilities on Ameriguard Security and Absolute Health 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 Ameriguard Security with a short position of Absolute Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriguard Security and Absolute Health.

Diversification Opportunities for Ameriguard Security and Absolute Health

0.44

Correlation Coefficient

Ameriguard Security  Absolute Health

Very weak diversification

The 3 months correlation between Ameriguard and Absolute is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ameriguard Security Services and Absolute Health and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Health and Ameriguard Security 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 Ameriguard Security Services are associated (or correlated) with Absolute Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Health has no effect on the direction of Ameriguard Security i.e., Ameriguard Security and Absolute Health go up and down completely randomly.

Pair Corralation between Ameriguard Security and Absolute Health

Given the investment horizon of 90 days Ameriguard Security is expected to generate 5.91 times less return on investment than Absolute Health. But when comparing it to its historical volatility, Ameriguard Security Services is 3.35 times less risky than Absolute Health. It trades about 0.02 of its potential returns per unit of risk. Absolute Health and is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.51  in Absolute Health and on October 12, 2024 and sell it today you would lose (0.51) from holding Absolute Health and or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Ameriguard Security Services  vs.  Absolute Health and

Ameriguard Security

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriguard Security Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Ameriguard Security unveiled solid returns over the last few months and may actually be approaching a breakup point.

Absolute Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Absolute Health and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ameriguard Security and Absolute Health

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

The idea behind Ameriguard Security Services and Absolute Health and 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.