Correlation Between II Group and After You

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

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

Diversification Opportunities for II Group and After You

-0.81

Correlation Coefficient

II Group  After You

Pay attention - limited upside

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

Pair Corralation between II Group and After You

Assuming the 90 days trading horizon II Group is expected to generate 1.1 times less return on investment than After You. But when comparing it to its historical volatility, II Group Public is 1.0 times less risky than After You. It trades about 0.08 of its potential returns per unit of risk. After You Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  690.00  in After You Public on September 22, 2024 and sell it today you would earn a total of  390.00  from holding After You Public or generate 56.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.19%
Values	Daily Returns

II Group Public  vs.  After You Public

II Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days II Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

After You Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in After You Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, After You may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with II Group and After You

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

The idea behind II Group Public and After You Public 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.