Correlation Between Aimia and Azimut Holding

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

By analyzing existing cross correlation between Aimia Inc and Azimut Holding SpA, you can compare the effects of market volatilities on Aimia and Azimut Holding 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 Aimia with a short position of Azimut Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Azimut Holding.

Diversification Opportunities for Aimia and Azimut Holding

-0.34

Correlation Coefficient

Aimia  Azimut Holding

Very good diversification

The 3 months correlation between Aimia and Azimut is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Azimut Holding SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Holding SpA and Aimia 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 Aimia Inc are associated (or correlated) with Azimut Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Holding SpA has no effect on the direction of Aimia i.e., Aimia and Azimut Holding go up and down completely randomly.

Pair Corralation between Aimia and Azimut Holding

Assuming the 90 days horizon Aimia Inc is expected to under-perform the Azimut Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aimia Inc is 2.38 times less risky than Azimut Holding. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Azimut Holding SpA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,658  in Azimut Holding SpA on August 31, 2024 and sell it today you would lose (168.00) from holding Azimut Holding SpA or give up 6.32% of portfolio value over 90 days.

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

Aimia Inc  vs.  Azimut Holding SpA

Aimia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aimia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Azimut Holding SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Azimut Holding SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Azimut Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aimia and Azimut Holding

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

The idea behind Aimia Inc and Azimut Holding SpA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.