Correlation Between A2Z Smart and Chicago Rivet

Can any of the company-specific risk be diversified away by investing in both A2Z Smart and Chicago Rivet 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 A2Z Smart and Chicago Rivet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A2Z Smart Technologies and Chicago Rivet Machine, you can compare the effects of market volatilities on A2Z Smart and Chicago Rivet 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 A2Z Smart with a short position of Chicago Rivet. Check out your portfolio center. Please also check ongoing floating volatility patterns of A2Z Smart and Chicago Rivet.

Diversification Opportunities for A2Z Smart and Chicago Rivet

-0.14

Correlation Coefficient

A2Z Smart  Chicago Rivet

Good diversification

The 3 months correlation between A2Z and Chicago is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding A2Z Smart Technologies and Chicago Rivet Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Rivet Machine and A2Z Smart 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 A2Z Smart Technologies are associated (or correlated) with Chicago Rivet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Rivet Machine has no effect on the direction of A2Z Smart i.e., A2Z Smart and Chicago Rivet go up and down completely randomly.

Pair Corralation between A2Z Smart and Chicago Rivet

Allowing for the 90-day total investment horizon A2Z Smart Technologies is expected to generate 1.83 times more return on investment than Chicago Rivet. However, A2Z Smart is 1.83 times more volatile than Chicago Rivet Machine. It trades about -0.01 of its potential returns per unit of risk. Chicago Rivet Machine is currently generating about -0.12 per unit of risk. If you would invest  730.00  in A2Z Smart Technologies on December 17, 2024 and sell it today you would lose (55.00) from holding A2Z Smart Technologies or give up 7.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

A2Z Smart Technologies  vs.  Chicago Rivet Machine

A2Z Smart Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days A2Z Smart Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, A2Z Smart is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Chicago Rivet Machine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chicago Rivet Machine has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with A2Z Smart and Chicago Rivet

The main advantage of trading using opposite A2Z Smart and Chicago Rivet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A2Z Smart position performs unexpectedly, Chicago Rivet 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 Chicago Rivet will offset losses from the drop in Chicago Rivet's long position.

The idea behind A2Z Smart Technologies and Chicago Rivet Machine 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.