Correlation Between Axilion Smart and Foresight Autonomous

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

By analyzing existing cross correlation between Axilion Smart Mobility and Foresight Autonomous Holdings, you can compare the effects of market volatilities on Axilion Smart and Foresight Autonomous 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 Axilion Smart with a short position of Foresight Autonomous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axilion Smart and Foresight Autonomous.

Diversification Opportunities for Axilion Smart and Foresight Autonomous

-0.22

Correlation Coefficient

Axilion Smart  Foresight Autonomous

Very good diversification

The 3 months correlation between Axilion and Foresight is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Axilion Smart Mobility and Foresight Autonomous Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foresight Autonomous and Axilion Smart 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 Axilion Smart Mobility are associated (or correlated) with Foresight Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foresight Autonomous has no effect on the direction of Axilion Smart i.e., Axilion Smart and Foresight Autonomous go up and down completely randomly.

Pair Corralation between Axilion Smart and Foresight Autonomous

Assuming the 90 days trading horizon Axilion Smart Mobility is expected to under-perform the Foresight Autonomous. In addition to that, Axilion Smart is 1.05 times more volatile than Foresight Autonomous Holdings. It trades about -0.03 of its total potential returns per unit of risk. Foresight Autonomous Holdings is currently generating about -0.02 per unit of volatility. If you would invest  3,390  in Foresight Autonomous Holdings on September 25, 2024 and sell it today you would lose (1,880) from holding Foresight Autonomous Holdings or give up 55.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.74%
Values	Daily Returns

Axilion Smart Mobility  vs.  Foresight Autonomous Holdings

Axilion Smart Mobility

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Axilion Smart Mobility are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Axilion Smart sustained solid returns over the last few months and may actually be approaching a breakup point.

Foresight Autonomous

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Foresight Autonomous Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Foresight Autonomous sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axilion Smart and Foresight Autonomous

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

The idea behind Axilion Smart Mobility and Foresight Autonomous Holdings 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.