Correlation Between Ideanomics and Austin Engineering

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

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

Diversification Opportunities for Ideanomics and Austin Engineering

-0.05

Correlation Coefficient

Ideanomics  Austin Engineering

Good diversification

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

Pair Corralation between Ideanomics and Austin Engineering

If you would invest  30.00  in Austin Engineering Limited on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Austin Engineering Limited or generate 0.0% return on investment over 90 days.

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

Ideanomics  vs.  Austin Engineering Limited

Ideanomics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ideanomics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Ideanomics showed solid returns over the last few months and may actually be approaching a breakup point.

Austin Engineering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Austin Engineering Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ideanomics and Austin Engineering

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

The idea behind Ideanomics and Austin Engineering Limited 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.