Correlation Between Avalon Holdings and ATIF Holdings

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

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

Diversification Opportunities for Avalon Holdings and ATIF Holdings

-0.77

Correlation Coefficient

Avalon Holdings  ATIF Holdings

Pay attention - limited upside

The 3 months correlation between Avalon and ATIF is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Avalon Holdings and ATIF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATIF Holdings and Avalon Holdings 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 Avalon Holdings are associated (or correlated) with ATIF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATIF Holdings has no effect on the direction of Avalon Holdings i.e., Avalon Holdings and ATIF Holdings go up and down completely randomly.

Pair Corralation between Avalon Holdings and ATIF Holdings

Considering the 90-day investment horizon Avalon Holdings is expected to generate 0.37 times more return on investment than ATIF Holdings. However, Avalon Holdings is 2.69 times less risky than ATIF Holdings. It trades about 0.1 of its potential returns per unit of risk. ATIF Holdings is currently generating about 0.01 per unit of risk. If you would invest  260.00  in Avalon Holdings on September 5, 2024 and sell it today you would earn a total of  55.00  from holding Avalon Holdings or generate 21.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Avalon Holdings  vs.  ATIF Holdings

Avalon Holdings

Risk-Adjusted Performance

7 of 100

OK

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

ATIF Holdings

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Avalon Holdings and ATIF Holdings

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

The idea behind Avalon Holdings and ATIF Holdings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.