Correlation Between Alps Electric and AT S

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

By analyzing existing cross correlation between Alps Electric Co and AT S Austria, you can compare the effects of market volatilities on Alps Electric and AT S 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 Alps Electric with a short position of AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alps Electric and AT S.

Diversification Opportunities for Alps Electric and AT S

-0.3

Correlation Coefficient

Alps Electric  AT S

Very good diversification

The 3 months correlation between Alps and ASAAF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alps Electric Co and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria and Alps Electric 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 Alps Electric Co are associated (or correlated) with AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Alps Electric i.e., Alps Electric and AT S go up and down completely randomly.

Pair Corralation between Alps Electric and AT S

Assuming the 90 days horizon Alps Electric Co is expected to under-perform the AT S. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alps Electric Co is 1.12 times less risky than AT S. The pink sheet trades about 0.0 of its potential returns per unit of risk. The AT S Austria is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,865  in AT S Austria on September 4, 2024 and sell it today you would earn a total of  160.00  from holding AT S Austria or generate 8.58% return on investment over 90 days.

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

Alps Electric Co  vs.  AT S Austria

Alps Electric

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alps Electric Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Alps Electric is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

AT S Austria

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AT S Austria are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, AT S may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alps Electric and AT S

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

The idea behind Alps Electric Co and AT S Austria 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.