Correlation Between Akwel SA and Moulinvest

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

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

Diversification Opportunities for Akwel SA and Moulinvest

0.48

Correlation Coefficient

Akwel SA  Moulinvest

Very weak diversification

The 3 months correlation between Akwel and Moulinvest is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Akwel SA and Moulinvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moulinvest and Akwel SA 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 Akwel SA are associated (or correlated) with Moulinvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moulinvest has no effect on the direction of Akwel SA i.e., Akwel SA and Moulinvest go up and down completely randomly.

Pair Corralation between Akwel SA and Moulinvest

Assuming the 90 days trading horizon Akwel SA is expected to under-perform the Moulinvest. But the stock apears to be less risky and, when comparing its historical volatility, Akwel SA is 1.34 times less risky than Moulinvest. The stock trades about -0.12 of its potential returns per unit of risk. The Moulinvest is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest  1,210  in Moulinvest on October 8, 2024 and sell it today you would earn a total of  250.00  from holding Moulinvest or generate 20.66% return on investment over 90 days.

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

Akwel SA  vs.  Moulinvest

Akwel SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akwel SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Moulinvest

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moulinvest are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Moulinvest is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Akwel SA and Moulinvest

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

The idea behind Akwel SA and Moulinvest 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.