Correlation Between GainClients and Allied Energy

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

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

Diversification Opportunities for GainClients and Allied Energy

0.0

Correlation Coefficient

GainClients  Allied Energy

Pay attention - limited upside

The 3 months correlation between GainClients and Allied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GainClients and Allied Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Energy and GainClients 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 GainClients are associated (or correlated) with Allied Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Energy has no effect on the direction of GainClients i.e., GainClients and Allied Energy go up and down completely randomly.

Pair Corralation between GainClients and Allied Energy

If you would invest  1.29  in Allied Energy on December 21, 2024 and sell it today you would lose (0.14) from holding Allied Energy or give up 10.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

GainClients  vs.  Allied Energy

GainClients

Risk-Adjusted Performance

Very Weak

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

Allied Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Allied Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, Allied Energy demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GainClients and Allied Energy

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

The idea behind GainClients and Allied Energy 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.