Correlation Between A Cap and Azimut Exploration

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

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

Diversification Opportunities for A Cap and Azimut Exploration

0.0

Correlation Coefficient

A Cap  Azimut Exploration

Pay attention - limited upside

The 3 months correlation between APCDF and Azimut is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding A Cap Energy Limited and Azimut Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Exploration and A Cap 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 A Cap Energy Limited are associated (or correlated) with Azimut Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Exploration has no effect on the direction of A Cap i.e., A Cap and Azimut Exploration go up and down completely randomly.

Pair Corralation between A Cap and Azimut Exploration

If you would invest (100.00) in A Cap Energy Limited on December 29, 2024 and sell it today you would earn a total of  100.00  from holding A Cap Energy Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

A Cap Energy Limited  vs.  Azimut Exploration

A Cap Energy

Risk-Adjusted Performance

Very Weak

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

Azimut Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Azimut Exploration 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with A Cap and Azimut Exploration

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

The idea behind A Cap Energy Limited and Azimut Exploration 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.