Correlation Between AKRO and ABL

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

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

Diversification Opportunities for AKRO and ABL

-0.44

Correlation Coefficient

AKRO  ABL

Very good diversification

The 3 months correlation between AKRO and ABL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AKRO and ABL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABL and AKRO 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 AKRO are associated (or correlated) with ABL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABL has no effect on the direction of AKRO i.e., AKRO and ABL go up and down completely randomly.

Pair Corralation between AKRO and ABL

If you would invest  0.46  in AKRO on August 30, 2024 and sell it today you would lose (0.01) from holding AKRO or give up 2.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

AKRO  vs.  ABL

AKRO

Risk-Adjusted Performance

0 of 100

Very Weak

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

ABL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AKRO and ABL

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

The idea behind AKRO and ABL 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.