Correlation Between Aperam SA and Adriano Care

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

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

Diversification Opportunities for Aperam SA and Adriano Care

0.7

Correlation Coefficient

Aperam SA  Adriano Care

Poor diversification

The 3 months correlation between Aperam and Adriano is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aperam SA and Adriano Care SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriano Care SOCIMI and Aperam 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 Aperam SA are associated (or correlated) with Adriano Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriano Care SOCIMI has no effect on the direction of Aperam SA i.e., Aperam SA and Adriano Care go up and down completely randomly.

Pair Corralation between Aperam SA and Adriano Care

Assuming the 90 days trading horizon Aperam SA is expected to generate 16.5 times more return on investment than Adriano Care. However, Aperam SA is 16.5 times more volatile than Adriano Care SOCIMI. It trades about 0.09 of its potential returns per unit of risk. Adriano Care SOCIMI is currently generating about 0.13 per unit of risk. If you would invest  2,641  in Aperam SA on December 1, 2024 and sell it today you would earn a total of  289.00  from holding Aperam SA or generate 10.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Aperam SA  vs.  Adriano Care SOCIMI

Aperam SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aperam SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Aperam SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Adriano Care SOCIMI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adriano Care SOCIMI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Adriano Care is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aperam SA and Adriano Care

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

The idea behind Aperam SA and Adriano Care SOCIMI 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.