Correlation Between AULT Old and CHKEZ Old

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

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

Diversification Opportunities for AULT Old and CHKEZ Old

0.62

Correlation Coefficient

AULT Old  CHKEZ Old

Poor diversification

The 3 months correlation between AULT and CHKEZ is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AULT Old and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old and AULT Old 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 AULT Old are associated (or correlated) with CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of AULT Old i.e., AULT Old and CHKEZ Old go up and down completely randomly.

Pair Corralation between AULT Old and CHKEZ Old

Given the investment horizon of 90 days AULT Old is expected to under-perform the CHKEZ Old. In addition to that, AULT Old is 3.87 times more volatile than CHKEZ Old. It trades about -0.2 of its total potential returns per unit of risk. CHKEZ Old is currently generating about 0.0 per unit of volatility. If you would invest  7,224  in CHKEZ Old on October 10, 2024 and sell it today you would lose (820.00) from holding CHKEZ Old or give up 11.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.5%
Values	Daily Returns

AULT Old  vs.  CHKEZ Old

AULT Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AULT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, AULT Old is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CHKEZ Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHKEZ Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, CHKEZ Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AULT Old and CHKEZ Old

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

The idea behind AULT Old and CHKEZ Old 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.