Correlation Between AJ Advance and AddTech Hub

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

By analyzing existing cross correlation between AJ Advance Technology and AddTech Hub Public, you can compare the effects of market volatilities on AJ Advance and AddTech Hub 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 AJ Advance with a short position of AddTech Hub. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Advance and AddTech Hub.

Diversification Opportunities for AJ Advance and AddTech Hub

0.07

Correlation Coefficient

AJ Advance  AddTech Hub

Significant diversification

The 3 months correlation between AJA and AddTech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AJ Advance Technology and AddTech Hub Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddTech Hub Public and AJ Advance 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 AJ Advance Technology are associated (or correlated) with AddTech Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddTech Hub Public has no effect on the direction of AJ Advance i.e., AJ Advance and AddTech Hub go up and down completely randomly.

Pair Corralation between AJ Advance and AddTech Hub

Assuming the 90 days trading horizon AJ Advance Technology is expected to under-perform the AddTech Hub. In addition to that, AJ Advance is 1.99 times more volatile than AddTech Hub Public. It trades about -0.08 of its total potential returns per unit of risk. AddTech Hub Public is currently generating about 0.24 per unit of volatility. If you would invest  459.00  in AddTech Hub Public on October 6, 2024 and sell it today you would earn a total of  106.00  from holding AddTech Hub Public or generate 23.09% return on investment over 90 days.

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

AJ Advance Technology  vs.  AddTech Hub Public

AJ Advance Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AJ Advance Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

AddTech Hub Public

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AddTech Hub Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, AddTech Hub disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AJ Advance and AddTech Hub

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

The idea behind AJ Advance Technology and AddTech Hub Public 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.