Correlation Between AAC TECHNOLOGHLDGADR and BlackRock

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

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

Diversification Opportunities for AAC TECHNOLOGHLDGADR and BlackRock

0.76

Correlation Coefficient

AAC TECHNOLOGHLDGADR  BlackRock

Poor diversification

The 3 months correlation between AAC and BlackRock is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and BlackRock go up and down completely randomly.

Pair Corralation between AAC TECHNOLOGHLDGADR and BlackRock

Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 2.95 times more return on investment than BlackRock. However, AAC TECHNOLOGHLDGADR is 2.95 times more volatile than BlackRock. It trades about 0.15 of its potential returns per unit of risk. BlackRock is currently generating about 0.28 per unit of risk. If you would invest  326.00  in AAC TECHNOLOGHLDGADR on September 12, 2024 and sell it today you would earn a total of  118.00  from holding AAC TECHNOLOGHLDGADR or generate 36.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.19%
Values	Daily Returns

AAC TECHNOLOGHLDGADR  vs.  BlackRock

AAC TECHNOLOGHLDGADR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAC TECHNOLOGHLDGADR are ranked lower than 12 (%) 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.

BlackRock

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days BlackRock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, BlackRock reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AAC TECHNOLOGHLDGADR and BlackRock

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

The idea behind AAC TECHNOLOGHLDGADR and BlackRock 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.