Correlation Between Aclara Resources and Ackroo

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

By analyzing existing cross correlation between Aclara Resources and Ackroo Inc, you can compare the effects of market volatilities on Aclara Resources and Ackroo 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 Aclara Resources with a short position of Ackroo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aclara Resources and Ackroo.

Diversification Opportunities for Aclara Resources and Ackroo

-0.59

Correlation Coefficient

Aclara Resources  Ackroo

Excellent diversification

The 3 months correlation between Aclara and Ackroo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aclara Resources and Ackroo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ackroo Inc and Aclara Resources 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 Aclara Resources are associated (or correlated) with Ackroo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ackroo Inc has no effect on the direction of Aclara Resources i.e., Aclara Resources and Ackroo go up and down completely randomly.

Pair Corralation between Aclara Resources and Ackroo

Assuming the 90 days trading horizon Aclara Resources is expected to under-perform the Ackroo. But the stock apears to be less risky and, when comparing its historical volatility, Aclara Resources is 2.03 times less risky than Ackroo. The stock trades about -0.07 of its potential returns per unit of risk. The Ackroo Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Ackroo Inc on September 3, 2024 and sell it today you would earn a total of  2.00  from holding Ackroo Inc or generate 18.18% return on investment over 90 days.

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

Aclara Resources  vs.  Ackroo Inc

Aclara Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aclara Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ackroo Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ackroo Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ackroo showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aclara Resources and Ackroo

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

The idea behind Aclara Resources and Ackroo Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.