Correlation Between Creditwest Faktoring and Aygaz AS

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

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

Diversification Opportunities for Creditwest Faktoring and Aygaz AS

0.81

Correlation Coefficient

Creditwest Faktoring  Aygaz AS

Very poor diversification

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

Pair Corralation between Creditwest Faktoring and Aygaz AS

Assuming the 90 days trading horizon Creditwest Faktoring is expected to generate 1.56 times less return on investment than Aygaz AS. In addition to that, Creditwest Faktoring is 1.99 times more volatile than Aygaz AS. It trades about 0.06 of its total potential returns per unit of risk. Aygaz AS is currently generating about 0.18 per unit of volatility. If you would invest  14,730  in Aygaz AS on September 5, 2024 and sell it today you would earn a total of  3,110  from holding Aygaz AS or generate 21.11% return on investment over 90 days.

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

Creditwest Faktoring AS  vs.  Aygaz AS

Creditwest Faktoring

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Creditwest Faktoring demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Aygaz AS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aygaz AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Aygaz AS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creditwest Faktoring and Aygaz AS

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

The idea behind Creditwest Faktoring AS and Aygaz AS 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.