Correlation Between Api Group and ACS Actividades

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

By analyzing existing cross correlation between Api Group Corp and ACS Actividades de, you can compare the effects of market volatilities on Api Group and ACS Actividades 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 Api Group with a short position of ACS Actividades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Api Group and ACS Actividades.

Diversification Opportunities for Api Group and ACS Actividades

0.16

Correlation Coefficient

Api Group  ACS Actividades

Average diversification

The 3 months correlation between Api and ACS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Api Group Corp and ACS Actividades de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACS Actividades de and Api Group 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 Api Group Corp are associated (or correlated) with ACS Actividades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACS Actividades de has no effect on the direction of Api Group i.e., Api Group and ACS Actividades go up and down completely randomly.

Pair Corralation between Api Group and ACS Actividades

Considering the 90-day investment horizon Api Group is expected to generate 5.35 times less return on investment than ACS Actividades. But when comparing it to its historical volatility, Api Group Corp is 1.25 times less risky than ACS Actividades. It trades about 0.04 of its potential returns per unit of risk. ACS Actividades de is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4,725  in ACS Actividades de on December 26, 2024 and sell it today you would earn a total of  1,137  from holding ACS Actividades de or generate 24.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Api Group Corp  vs.  ACS Actividades de

Api Group Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Api Group Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Api Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ACS Actividades de

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ACS Actividades de are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ACS Actividades reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Api Group and ACS Actividades

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

The idea behind Api Group Corp and ACS Actividades de 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.