Correlation Between Aker Carbon and Atmofizer Technologies

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

By analyzing existing cross correlation between Aker Carbon Capture and Atmofizer Technologies, you can compare the effects of market volatilities on Aker Carbon and Atmofizer Technologies 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 Aker Carbon with a short position of Atmofizer Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Carbon and Atmofizer Technologies.

Diversification Opportunities for Aker Carbon and Atmofizer Technologies

0.21

Correlation Coefficient

Aker Carbon  Atmofizer Technologies

Modest diversification

The 3 months correlation between Aker and Atmofizer is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aker Carbon Capture and Atmofizer Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmofizer Technologies and Aker Carbon 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 Aker Carbon Capture are associated (or correlated) with Atmofizer Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmofizer Technologies has no effect on the direction of Aker Carbon i.e., Aker Carbon and Atmofizer Technologies go up and down completely randomly.

Pair Corralation between Aker Carbon and Atmofizer Technologies

Assuming the 90 days horizon Aker Carbon Capture is expected to under-perform the Atmofizer Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aker Carbon Capture is 6.21 times less risky than Atmofizer Technologies. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Atmofizer Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Atmofizer Technologies on September 29, 2024 and sell it today you would lose (13.00) from holding Atmofizer Technologies or give up 68.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Aker Carbon Capture  vs.  Atmofizer Technologies

Aker Carbon Capture

Risk-Adjusted Performance

0 of 100

Very Weak

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

Atmofizer Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atmofizer Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Atmofizer Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aker Carbon and Atmofizer Technologies

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

The idea behind Aker Carbon Capture and Atmofizer Technologies 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.