Correlation Between AirIQ and Two Hands

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

By analyzing existing cross correlation between AirIQ Inc and Two Hands Corp, you can compare the effects of market volatilities on AirIQ and Two Hands 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 AirIQ with a short position of Two Hands. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirIQ and Two Hands.

Diversification Opportunities for AirIQ and Two Hands

-0.14

Correlation Coefficient

AirIQ  Two Hands

Good diversification

The 3 months correlation between AirIQ and Two is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding AirIQ Inc and Two Hands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Two Hands Corp and AirIQ 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 AirIQ Inc are associated (or correlated) with Two Hands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Two Hands Corp has no effect on the direction of AirIQ i.e., AirIQ and Two Hands go up and down completely randomly.

Pair Corralation between AirIQ and Two Hands

Assuming the 90 days horizon AirIQ is expected to generate 144.83 times less return on investment than Two Hands. But when comparing it to its historical volatility, AirIQ Inc is 27.88 times less risky than Two Hands. It trades about 0.03 of its potential returns per unit of risk. Two Hands Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.73  in Two Hands Corp on September 4, 2024 and sell it today you would lose (0.72) from holding Two Hands Corp or give up 98.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

AirIQ Inc  vs.  Two Hands Corp

AirIQ Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AirIQ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Two Hands Corp

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Two Hands Corp are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Two Hands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AirIQ and Two Hands

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

The idea behind AirIQ Inc and Two Hands 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.