Correlation Between Axilion Smart and Kardan Real

Can any of the company-specific risk be diversified away by investing in both Axilion Smart and Kardan Real 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 Kardan Real 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 Kardan Real Estate, you can compare the effects of market volatilities on Axilion Smart and Kardan Real 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 Kardan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axilion Smart and Kardan Real.

Diversification Opportunities for Axilion Smart and Kardan Real

0.31

Correlation Coefficient

Axilion Smart  Kardan Real

Weak diversification

The 3 months correlation between Axilion and Kardan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Axilion Smart Mobility and Kardan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardan Real Estate 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 Kardan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardan Real Estate has no effect on the direction of Axilion Smart i.e., Axilion Smart and Kardan Real go up and down completely randomly.

Pair Corralation between Axilion Smart and Kardan Real

Assuming the 90 days trading horizon Axilion Smart Mobility is expected to generate 2.91 times more return on investment than Kardan Real. However, Axilion Smart is 2.91 times more volatile than Kardan Real Estate. It trades about 0.09 of its potential returns per unit of risk. Kardan Real Estate is currently generating about 0.17 per unit of risk. If you would invest  4,220  in Axilion Smart Mobility on September 27, 2024 and sell it today you would earn a total of  830.00  from holding Axilion Smart Mobility or generate 19.67% return on investment over 90 days.

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

Axilion Smart Mobility  vs.  Kardan Real Estate

Axilion Smart Mobility

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axilion Smart Mobility are ranked lower than 7 (%) 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.

Kardan Real Estate

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kardan Real Estate are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kardan Real sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axilion Smart and Kardan Real

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

The idea behind Axilion Smart Mobility and Kardan Real Estate 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.