Correlation Between Adler Group and Avalon GloboCare

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

By analyzing existing cross correlation between Adler Group SA and Avalon GloboCare Corp, you can compare the effects of market volatilities on Adler Group and Avalon GloboCare 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 Adler Group with a short position of Avalon GloboCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adler Group and Avalon GloboCare.

Diversification Opportunities for Adler Group and Avalon GloboCare

0.1

Correlation Coefficient

Adler Group  Avalon GloboCare

Average diversification

The 3 months correlation between Adler and Avalon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Adler Group SA and Avalon GloboCare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalon GloboCare Corp and Adler Group 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 Adler Group SA are associated (or correlated) with Avalon GloboCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalon GloboCare Corp has no effect on the direction of Adler Group i.e., Adler Group and Avalon GloboCare go up and down completely randomly.

Pair Corralation between Adler Group and Avalon GloboCare

Assuming the 90 days horizon Adler Group is expected to generate 2.4 times less return on investment than Avalon GloboCare. But when comparing it to its historical volatility, Adler Group SA is 3.94 times less risky than Avalon GloboCare. It trades about 0.13 of its potential returns per unit of risk. Avalon GloboCare Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  309.00  in Avalon GloboCare Corp on September 21, 2024 and sell it today you would earn a total of  45.00  from holding Avalon GloboCare Corp or generate 14.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Adler Group SA  vs.  Avalon GloboCare Corp

Adler Group SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adler Group SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Adler Group reported solid returns over the last few months and may actually be approaching a breakup point.

Avalon GloboCare Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avalon GloboCare Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, Avalon GloboCare unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adler Group and Avalon GloboCare

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

The idea behind Adler Group SA and Avalon GloboCare Corp 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.