Correlation Between Freight Technologies and Aware

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

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

Diversification Opportunities for Freight Technologies and Aware

-0.05

Correlation Coefficient

Freight Technologies  Aware

Good diversification

The 3 months correlation between Freight and Aware is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Freight Technologies and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and Freight Technologies 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 Freight Technologies are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Freight Technologies i.e., Freight Technologies and Aware go up and down completely randomly.

Pair Corralation between Freight Technologies and Aware

Given the investment horizon of 90 days Freight Technologies is expected to under-perform the Aware. In addition to that, Freight Technologies is 1.99 times more volatile than Aware Inc. It trades about 0.0 of its total potential returns per unit of risk. Aware Inc is currently generating about 0.06 per unit of volatility. If you would invest  152.00  in Aware Inc on December 19, 2024 and sell it today you would earn a total of  19.00  from holding Aware Inc or generate 12.5% return on investment over 90 days.

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

Freight Technologies  vs.  Aware Inc

Freight Technologies

Risk-Adjusted Performance

Very Weak

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

Aware Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aware Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Aware exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freight Technologies and Aware

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

The idea behind Freight Technologies and Aware Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.