Correlation Between After You and II Group

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

By analyzing existing cross correlation between After You Public and II Group Public, you can compare the effects of market volatilities on After You and II Group 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 After You with a short position of II Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of After You and II Group.

Diversification Opportunities for After You and II Group

-0.81

Correlation Coefficient

After You  II Group

Pay attention - limited upside

The 3 months correlation between After and IIG is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding After You Public and II Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on II Group Public and After You 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 After You Public are associated (or correlated) with II Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of II Group Public has no effect on the direction of After You i.e., After You and II Group go up and down completely randomly.

Pair Corralation between After You and II Group

Assuming the 90 days horizon After You Public is expected to generate 0.45 times more return on investment than II Group. However, After You Public is 2.21 times less risky than II Group. It trades about 0.1 of its potential returns per unit of risk. II Group Public is currently generating about -0.19 per unit of risk. If you would invest  980.00  in After You Public on September 22, 2024 and sell it today you would earn a total of  100.00  from holding After You Public or generate 10.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

After You Public  vs.  II Group Public

After You Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in After You Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, After You may actually be approaching a critical reversion point that can send shares even higher in January 2025.

II Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days II Group Public 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 technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with After You and II Group

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

The idea behind After You Public and II Group Public 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.