Correlation Between Alliance Global and Rjd Green

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

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

Diversification Opportunities for Alliance Global and Rjd Green

0.58

Correlation Coefficient

Alliance Global  Rjd Green

Very weak diversification

The 3 months correlation between Alliance and Rjd is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Global Group and Rjd Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rjd Green and Alliance Global 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 Alliance Global Group are associated (or correlated) with Rjd Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rjd Green has no effect on the direction of Alliance Global i.e., Alliance Global and Rjd Green go up and down completely randomly.

Pair Corralation between Alliance Global and Rjd Green

Assuming the 90 days horizon Alliance Global Group is expected to generate 0.26 times more return on investment than Rjd Green. However, Alliance Global Group is 3.92 times less risky than Rjd Green. It trades about -0.1 of its potential returns per unit of risk. Rjd Green is currently generating about -0.13 per unit of risk. If you would invest  807.00  in Alliance Global Group on September 4, 2024 and sell it today you would lose (71.00) from holding Alliance Global Group or give up 8.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Alliance Global Group  vs.  Rjd Green

Alliance Global Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliance Global Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Rjd Green

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rjd Green has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Alliance Global and Rjd Green

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

The idea behind Alliance Global Group and Rjd Green 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 Transaction History module to view history of all your transactions and understand their impact on performance.