Correlation Between Mach7 Technologies and ACDC Metals

Can any of the company-specific risk be diversified away by investing in both Mach7 Technologies and ACDC Metals 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 Mach7 Technologies and ACDC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mach7 Technologies and ACDC Metals, you can compare the effects of market volatilities on Mach7 Technologies and ACDC Metals 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 Mach7 Technologies with a short position of ACDC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mach7 Technologies and ACDC Metals.

Diversification Opportunities for Mach7 Technologies and ACDC Metals

0.71

Correlation Coefficient

Mach7 Technologies  ACDC Metals

Poor diversification

The 3 months correlation between Mach7 and ACDC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mach7 Technologies and ACDC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACDC Metals and Mach7 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 Mach7 Technologies are associated (or correlated) with ACDC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACDC Metals has no effect on the direction of Mach7 Technologies i.e., Mach7 Technologies and ACDC Metals go up and down completely randomly.

Pair Corralation between Mach7 Technologies and ACDC Metals

Assuming the 90 days trading horizon Mach7 Technologies is expected to under-perform the ACDC Metals. But the stock apears to be less risky and, when comparing its historical volatility, Mach7 Technologies is 1.14 times less risky than ACDC Metals. The stock trades about -0.14 of its potential returns per unit of risk. The ACDC Metals is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  6.80  in ACDC Metals on October 25, 2024 and sell it today you would lose (1.50) from holding ACDC Metals or give up 22.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Mach7 Technologies  vs.  ACDC Metals

Mach7 Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mach7 Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ACDC Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACDC Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Mach7 Technologies and ACDC Metals

The main advantage of trading using opposite Mach7 Technologies and ACDC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mach7 Technologies position performs unexpectedly, ACDC Metals 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 ACDC Metals will offset losses from the drop in ACDC Metals' long position.

The idea behind Mach7 Technologies and ACDC Metals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.