Correlation Between Api Group and Acciona SA

Can any of the company-specific risk be diversified away by investing in both Api Group and Acciona SA 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 Acciona SA 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 Acciona SA, you can compare the effects of market volatilities on Api Group and Acciona SA 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 Acciona SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Api Group and Acciona SA.

Diversification Opportunities for Api Group and Acciona SA

-0.4

Correlation Coefficient

Api Group  Acciona SA

Very good diversification

The 3 months correlation between Api and Acciona is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Api Group Corp and Acciona SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona SA 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 Acciona SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona SA has no effect on the direction of Api Group i.e., Api Group and Acciona SA go up and down completely randomly.

Pair Corralation between Api Group and Acciona SA

Considering the 90-day investment horizon Api Group is expected to generate 6.0 times less return on investment than Acciona SA. But when comparing it to its historical volatility, Api Group Corp is 1.33 times less risky than Acciona SA. It trades about 0.03 of its potential returns per unit of risk. Acciona SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  10,865  in Acciona SA on December 27, 2024 and sell it today you would earn a total of  1,779  from holding Acciona SA or generate 16.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.8%
Values	Daily Returns

Api Group Corp  vs.  Acciona SA

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 2 (%) 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.

Acciona SA

Risk-Adjusted Performance

OK

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

Pair Trading with Api Group and Acciona SA

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

The idea behind Api Group Corp and Acciona SA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.