Correlation Between Aluminumof China and Bet-at-home

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

By analyzing existing cross correlation between Aluminum of and bet at home AG, you can compare the effects of market volatilities on Aluminumof China and Bet-at-home 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 Aluminumof China with a short position of Bet-at-home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Bet-at-home.

Diversification Opportunities for Aluminumof China and Bet-at-home

-0.24

Correlation Coefficient

Aluminumof China  Bet-at-home

Very good diversification

The 3 months correlation between Aluminumof and Bet-at-home is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home and Aluminumof China 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 Aluminum of are associated (or correlated) with Bet-at-home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of Aluminumof China i.e., Aluminumof China and Bet-at-home go up and down completely randomly.

Pair Corralation between Aluminumof China and Bet-at-home

Assuming the 90 days horizon Aluminum of is expected to generate 2.04 times more return on investment than Bet-at-home. However, Aluminumof China is 2.04 times more volatile than bet at home AG. It trades about 0.12 of its potential returns per unit of risk. bet at home AG is currently generating about -0.16 per unit of risk. If you would invest  43.00  in Aluminum of on September 12, 2024 and sell it today you would earn a total of  14.00  from holding Aluminum of or generate 32.56% return on investment over 90 days.

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

Aluminum of  vs.  bet at home AG

Aluminumof China

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum of are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aluminumof China reported solid returns over the last few months and may actually be approaching a breakup point.

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Aluminumof China and Bet-at-home

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

The idea behind Aluminum of and bet at home AG 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.