Correlation Between CODERE ONLINE and AAC TECHNOLOGHLDGADR

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

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

Diversification Opportunities for CODERE ONLINE and AAC TECHNOLOGHLDGADR

-0.37

Correlation Coefficient

CODERE ONLINE  AAC TECHNOLOGHLDGADR

Very good diversification

The 3 months correlation between CODERE and AAC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CODERE ONLINE LUX and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and CODERE ONLINE 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 CODERE ONLINE LUX are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of CODERE ONLINE i.e., CODERE ONLINE and AAC TECHNOLOGHLDGADR go up and down completely randomly.

Pair Corralation between CODERE ONLINE and AAC TECHNOLOGHLDGADR

Assuming the 90 days horizon CODERE ONLINE LUX is expected to under-perform the AAC TECHNOLOGHLDGADR. But the stock apears to be less risky and, when comparing its historical volatility, CODERE ONLINE LUX is 1.13 times less risky than AAC TECHNOLOGHLDGADR. The stock trades about -0.09 of its potential returns per unit of risk. The AAC TECHNOLOGHLDGADR is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  398.00  in AAC TECHNOLOGHLDGADR on October 6, 2024 and sell it today you would earn a total of  60.00  from holding AAC TECHNOLOGHLDGADR or generate 15.08% return on investment over 90 days.

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

CODERE ONLINE LUX  vs.  AAC TECHNOLOGHLDGADR

CODERE ONLINE LUX

Risk-Adjusted Performance

0 of 100

Very Weak

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

AAC TECHNOLOGHLDGADR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AAC TECHNOLOGHLDGADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AAC TECHNOLOGHLDGADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CODERE ONLINE and AAC TECHNOLOGHLDGADR

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

The idea behind CODERE ONLINE LUX and AAC TECHNOLOGHLDGADR 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.