Correlation Between Albertsons Companies and Alpha Cognition

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

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

Diversification Opportunities for Albertsons Companies and Alpha Cognition

0.58

Correlation Coefficient

Albertsons Companies  Alpha Cognition

Very weak diversification

The 3 months correlation between Albertsons and Alpha is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Alpha Cognition Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Cognition Common and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Alpha Cognition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Cognition Common has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Alpha Cognition go up and down completely randomly.

Pair Corralation between Albertsons Companies and Alpha Cognition

Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.18 times more return on investment than Alpha Cognition. However, Albertsons Companies is 5.64 times less risky than Alpha Cognition. It trades about 0.01 of its potential returns per unit of risk. Alpha Cognition Common is currently generating about -0.17 per unit of risk. If you would invest  1,950  in Albertsons Companies on September 25, 2024 and sell it today you would earn a total of  3.50  from holding Albertsons Companies or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	23.81%
Values	Daily Returns

Albertsons Companies  vs.  Alpha Cognition Common

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 uncertain fundamental indicators, Albertsons Companies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alpha Cognition Common

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Albertsons Companies and Alpha Cognition

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

The idea behind Albertsons Companies and Alpha Cognition Common 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.