Correlation Between Advanced Info and Assetwise Public

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

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

Diversification Opportunities for Advanced Info and Assetwise Public

0.63

Correlation Coefficient

Advanced Info  Assetwise Public

Poor diversification

The 3 months correlation between Advanced and Assetwise is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Assetwise Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assetwise Public and Advanced Info 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 Advanced Info Service are associated (or correlated) with Assetwise Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assetwise Public has no effect on the direction of Advanced Info i.e., Advanced Info and Assetwise Public go up and down completely randomly.

Pair Corralation between Advanced Info and Assetwise Public

Assuming the 90 days trading horizon Advanced Info Service is expected to generate 2.31 times more return on investment than Assetwise Public. However, Advanced Info is 2.31 times more volatile than Assetwise Public. It trades about 0.04 of its potential returns per unit of risk. Assetwise Public is currently generating about 0.08 per unit of risk. If you would invest  26,500  in Advanced Info Service on September 24, 2024 and sell it today you would earn a total of  900.00  from holding Advanced Info Service or generate 3.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Advanced Info Service  vs.  Assetwise Public

Advanced Info Service

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Info Service are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Advanced Info is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Assetwise Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Assetwise Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Assetwise Public is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Advanced Info and Assetwise Public

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

The idea behind Advanced Info Service and Assetwise Public 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.