Correlation Between AJWA For and Speed Medical

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

By analyzing existing cross correlation between AJWA for Food and Speed Medical, you can compare the effects of market volatilities on AJWA For and Speed Medical 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 AJWA For with a short position of Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJWA For and Speed Medical.

Diversification Opportunities for AJWA For and Speed Medical

0.3

Correlation Coefficient

AJWA For  Speed Medical

Weak diversification

The 3 months correlation between AJWA and Speed is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AJWA for Food and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical and AJWA For 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 AJWA for Food are associated (or correlated) with Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of AJWA For i.e., AJWA For and Speed Medical go up and down completely randomly.

Pair Corralation between AJWA For and Speed Medical

Assuming the 90 days trading horizon AJWA for Food is expected to generate 1.2 times more return on investment than Speed Medical. However, AJWA For is 1.2 times more volatile than Speed Medical. It trades about 0.13 of its potential returns per unit of risk. Speed Medical is currently generating about 0.09 per unit of risk. If you would invest  9,900  in AJWA for Food on December 27, 2024 and sell it today you would earn a total of  2,125  from holding AJWA for Food or generate 21.46% return on investment over 90 days.

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

AJWA for Food  vs.  Speed Medical

AJWA for Food

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AJWA for Food are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, AJWA For reported solid returns over the last few months and may actually be approaching a breakup point.

Speed Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Speed Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Speed Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AJWA For and Speed Medical

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

The idea behind AJWA for Food and Speed Medical 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..