Correlation Between 48305QAB9 and Albertsons Companies

Can any of the company-specific risk be diversified away by investing in both 48305QAB9 and Albertsons Companies 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 48305QAB9 and Albertsons Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US48305QAB95 and Albertsons Companies, you can compare the effects of market volatilities on 48305QAB9 and Albertsons Companies 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 48305QAB9 with a short position of Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of 48305QAB9 and Albertsons Companies.

Diversification Opportunities for 48305QAB9 and Albertsons Companies

-0.48

Correlation Coefficient

48305QAB9  Albertsons Companies

Very good diversification

The 3 months correlation between 48305QAB9 and Albertsons is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding US48305QAB95 and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and 48305QAB9 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 US48305QAB95 are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of 48305QAB9 i.e., 48305QAB9 and Albertsons Companies go up and down completely randomly.

Pair Corralation between 48305QAB9 and Albertsons Companies

Assuming the 90 days trading horizon 48305QAB9 is expected to generate 2.22 times less return on investment than Albertsons Companies. In addition to that, 48305QAB9 is 1.05 times more volatile than Albertsons Companies. It trades about 0.03 of its total potential returns per unit of risk. Albertsons Companies is currently generating about 0.08 per unit of volatility. If you would invest  1,832  in Albertsons Companies on October 9, 2024 and sell it today you would earn a total of  128.00  from holding Albertsons Companies or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	54.84%
Values	Daily Returns

US48305QAB95  vs.  Albertsons Companies

US48305QAB95

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in US48305QAB95 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 48305QAB9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Albertsons Companies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Albertsons Companies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Albertsons Companies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 48305QAB9 and Albertsons Companies

The main advantage of trading using opposite 48305QAB9 and Albertsons Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 48305QAB9 position performs unexpectedly, Albertsons Companies 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 Albertsons Companies will offset losses from the drop in Albertsons Companies' long position.

The idea behind US48305QAB95 and Albertsons Companies 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.