Correlation Between 4Imprint Group and AJ Bell

Can any of the company-specific risk be diversified away by investing in both 4Imprint Group and AJ Bell 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 4Imprint Group and AJ Bell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 4Imprint Group Plc and AJ Bell plc, you can compare the effects of market volatilities on 4Imprint Group and AJ Bell 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 4Imprint Group with a short position of AJ Bell. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Imprint Group and AJ Bell.

Diversification Opportunities for 4Imprint Group and AJ Bell

0.62

Correlation Coefficient

4Imprint Group  AJ Bell

Poor diversification

The 3 months correlation between 4Imprint and AJB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding 4Imprint Group Plc and AJ Bell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Bell plc and 4Imprint Group 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 4Imprint Group Plc are associated (or correlated) with AJ Bell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Bell plc has no effect on the direction of 4Imprint Group i.e., 4Imprint Group and AJ Bell go up and down completely randomly.

Pair Corralation between 4Imprint Group and AJ Bell

Assuming the 90 days trading horizon 4Imprint Group Plc is expected to under-perform the AJ Bell. In addition to that, 4Imprint Group is 1.71 times more volatile than AJ Bell plc. It trades about -0.11 of its total potential returns per unit of risk. AJ Bell plc is currently generating about -0.05 per unit of volatility. If you would invest  44,116  in AJ Bell plc on December 30, 2024 and sell it today you would lose (2,616) from holding AJ Bell plc or give up 5.93% of portfolio value over 90 days.

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

4Imprint Group Plc  vs.  AJ Bell plc

4Imprint Group Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days 4Imprint Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

AJ Bell plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AJ Bell plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AJ Bell is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 4Imprint Group and AJ Bell

The main advantage of trading using opposite 4Imprint Group and AJ Bell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Imprint Group position performs unexpectedly, AJ Bell 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 AJ Bell will offset losses from the drop in AJ Bell's long position.

The idea behind 4Imprint Group Plc and AJ Bell plc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.