Correlation Between AKA Brands and Allegroeu

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

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

Diversification Opportunities for AKA Brands and Allegroeu

-0.73

Correlation Coefficient

AKA Brands  Allegroeu

Pay attention - limited upside

The 3 months correlation between AKA and Allegroeu is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu SA and AKA Brands 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 AKA Brands Holding are associated (or correlated) with Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of AKA Brands i.e., AKA Brands and Allegroeu go up and down completely randomly.

Pair Corralation between AKA Brands and Allegroeu

Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the Allegroeu. In addition to that, AKA Brands is 3.06 times more volatile than Allegroeu SA. It trades about -0.05 of its total potential returns per unit of risk. Allegroeu SA is currently generating about 0.13 per unit of volatility. If you would invest  671.00  in Allegroeu SA on December 28, 2024 and sell it today you would earn a total of  94.00  from holding Allegroeu SA or generate 14.01% return on investment over 90 days.

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

AKA Brands Holding  vs.  Allegroeu SA

AKA Brands Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days AKA Brands Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Allegroeu SA

Risk-Adjusted Performance

OK

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

Pair Trading with AKA Brands and Allegroeu

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

The idea behind AKA Brands Holding and Allegroeu SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.