Correlation Between Altech Batteries and AdvanSix

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

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

Diversification Opportunities for Altech Batteries and AdvanSix

-0.18

Correlation Coefficient

Altech Batteries  AdvanSix

Good diversification

The 3 months correlation between Altech and AdvanSix is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Altech Batteries Limited and AdvanSix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvanSix and Altech Batteries 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 Altech Batteries Limited are associated (or correlated) with AdvanSix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvanSix has no effect on the direction of Altech Batteries i.e., Altech Batteries and AdvanSix go up and down completely randomly.

Pair Corralation between Altech Batteries and AdvanSix

Assuming the 90 days horizon Altech Batteries Limited is expected to generate 2.78 times more return on investment than AdvanSix. However, Altech Batteries is 2.78 times more volatile than AdvanSix. It trades about -0.01 of its potential returns per unit of risk. AdvanSix is currently generating about -0.13 per unit of risk. If you would invest  3.50  in Altech Batteries Limited on December 30, 2024 and sell it today you would lose (0.58) from holding Altech Batteries Limited or give up 16.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Altech Batteries Limited  vs.  AdvanSix

Altech Batteries

Risk-Adjusted Performance

Very Weak

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

AdvanSix

Risk-Adjusted Performance

Very Weak

Over the last 90 days AdvanSix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain fairly 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.

Pair Trading with Altech Batteries and AdvanSix

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

The idea behind Altech Batteries Limited and AdvanSix 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.