Correlation Between Axilion Smart and Rotshtein

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

Diversification Opportunities for Axilion Smart and Rotshtein

0.31

Correlation Coefficient

Axilion Smart  Rotshtein

Weak diversification

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

Pair Corralation between Axilion Smart and Rotshtein

Assuming the 90 days trading horizon Axilion Smart Mobility is expected to generate 1.37 times more return on investment than Rotshtein. However, Axilion Smart is 1.37 times more volatile than Rotshtein. It trades about 0.18 of its potential returns per unit of risk. Rotshtein is currently generating about 0.08 per unit of risk. If you would invest  4,360  in Axilion Smart Mobility on September 28, 2024 and sell it today you would earn a total of  460.00  from holding Axilion Smart Mobility or generate 10.55% 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.  Rotshtein

Axilion Smart Mobility

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axilion Smart Mobility are ranked lower than 5 (%) 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.

Rotshtein

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rotshtein are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rotshtein sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axilion Smart and Rotshtein

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

The idea behind Axilion Smart Mobility and Rotshtein 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.

Check out your portfolio center.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.