Correlation Between AJ Bell and 4Imprint Group

Can any of the company-specific risk be diversified away by investing in both AJ Bell and 4Imprint Group 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 Bell and 4Imprint Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AJ Bell plc and 4Imprint Group Plc, you can compare the effects of market volatilities on AJ Bell and 4Imprint Group 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 Bell with a short position of 4Imprint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Bell and 4Imprint Group.

Diversification Opportunities for AJ Bell and 4Imprint Group

0.62

Correlation Coefficient

AJ Bell  4Imprint Group

Poor diversification

The 3 months correlation between AJB and 4Imprint is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AJ Bell plc and 4Imprint Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Imprint Group Plc and AJ Bell 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 Bell plc are associated (or correlated) with 4Imprint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Imprint Group Plc has no effect on the direction of AJ Bell i.e., AJ Bell and 4Imprint Group go up and down completely randomly.

Pair Corralation between AJ Bell and 4Imprint Group

Assuming the 90 days trading horizon AJ Bell plc is expected to generate 0.59 times more return on investment than 4Imprint Group. However, AJ Bell plc is 1.71 times less risky than 4Imprint Group. It trades about -0.05 of its potential returns per unit of risk. 4Imprint Group Plc is currently generating about -0.11 per unit of risk. If you would invest  44,116  in AJ Bell plc on December 30, 2024 and sell it today you would lose (2,616) from holding AJ Bell plc or give up 5.93% of portfolio value over 90 days.

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

AJ Bell plc  vs.  4Imprint Group Plc

AJ Bell plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AJ Bell plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AJ Bell is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

4Imprint Group Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days 4Imprint Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AJ Bell and 4Imprint Group

The main advantage of trading using opposite AJ Bell and 4Imprint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Bell position performs unexpectedly, 4Imprint Group 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 4Imprint Group will offset losses from the drop in 4Imprint Group's long position.

The idea behind AJ Bell plc and 4Imprint Group Plc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.