Correlation Between Addentax Group and Royal Mail

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Addentax Group and Royal Mail 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 Addentax Group and Royal Mail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addentax Group Corp and Royal Mail PLC, you can compare the effects of market volatilities on Addentax Group and Royal Mail 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 Addentax Group with a short position of Royal Mail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addentax Group and Royal Mail.

Diversification Opportunities for Addentax Group and Royal Mail

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Addentax and Royal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Addentax Group Corp and Royal Mail PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Mail PLC and Addentax 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 Addentax Group Corp are associated (or correlated) with Royal Mail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Mail PLC has no effect on the direction of Addentax Group i.e., Addentax Group and Royal Mail go up and down completely randomly.

Pair Corralation between Addentax Group and Royal Mail

Given the investment horizon of 90 days Addentax Group Corp is expected to under-perform the Royal Mail. In addition to that, Addentax Group is 11.55 times more volatile than Royal Mail PLC. It trades about -0.01 of its total potential returns per unit of risk. Royal Mail PLC is currently generating about 0.15 per unit of volatility. If you would invest  893.00  in Royal Mail PLC on October 4, 2024 and sell it today you would earn a total of  15.00  from holding Royal Mail PLC or generate 1.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Addentax Group Corp  vs.  Royal Mail PLC

 Performance 
       Timeline  
Addentax Group Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Addentax Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Royal Mail PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Royal Mail PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Royal Mail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Addentax Group and Royal Mail Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Addentax Group and Royal Mail

The main advantage of trading using opposite Addentax Group and Royal Mail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addentax Group position performs unexpectedly, Royal Mail 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 Royal Mail will offset losses from the drop in Royal Mail's long position.
The idea behind Addentax Group Corp and Royal Mail PLC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Stocks Directory
Find actively traded stocks across global markets