Correlation Between AT S and Alps Electric

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

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

Diversification Opportunities for AT S and Alps Electric

0.22

Correlation Coefficient

AT S  Alps Electric

Modest diversification

The 3 months correlation between ASAAF and Alps is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and Alps Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alps Electric and AT S 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 AT S Austria are associated (or correlated) with Alps Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alps Electric has no effect on the direction of AT S i.e., AT S and Alps Electric go up and down completely randomly.

Pair Corralation between AT S and Alps Electric

Assuming the 90 days horizon AT S Austria is expected to under-perform the Alps Electric. In addition to that, AT S is 2.35 times more volatile than Alps Electric Co. It trades about -0.09 of its total potential returns per unit of risk. Alps Electric Co is currently generating about 0.03 per unit of volatility. If you would invest  2,046  in Alps Electric Co on December 28, 2024 and sell it today you would earn a total of  63.00  from holding Alps Electric Co or generate 3.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

AT S Austria  vs.  Alps Electric Co

AT S Austria

Risk-Adjusted Performance

Very Weak

Over the last 90 days AT S Austria has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Alps Electric

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alps Electric Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with AT S and Alps Electric

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

The idea behind AT S Austria and Alps Electric Co 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.