Correlation Between American Security and Azelio AB

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

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

Diversification Opportunities for American Security and Azelio AB

0.0

Correlation Coefficient

American Security  Azelio AB

Pay attention - limited upside

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

Pair Corralation between American Security and Azelio AB

If you would invest  0.01  in American Security Resources on December 29, 2024 and sell it today you would earn a total of  0.00  from holding American Security Resources or generate 0.0% return on investment over 90 days.

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

American Security Resources  vs.  Azelio AB

American Security

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Security Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, American Security exhibited solid returns over the last few months and may actually be approaching a breakup point.

Azelio AB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with American Security and Azelio AB

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

The idea behind American Security Resources and Azelio AB 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.