Correlation Between Ackroo and CurrentC Power

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

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

Diversification Opportunities for Ackroo and CurrentC Power

-0.07

Correlation Coefficient

Ackroo  CurrentC Power

Good diversification

The 3 months correlation between Ackroo and CurrentC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ackroo Inc and CurrentC Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CurrentC Power and Ackroo 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 Ackroo Inc are associated (or correlated) with CurrentC Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CurrentC Power has no effect on the direction of Ackroo i.e., Ackroo and CurrentC Power go up and down completely randomly.

Pair Corralation between Ackroo and CurrentC Power

Assuming the 90 days horizon Ackroo is expected to generate 19.41 times less return on investment than CurrentC Power. But when comparing it to its historical volatility, Ackroo Inc is 9.01 times less risky than CurrentC Power. It trades about 0.1 of its potential returns per unit of risk. CurrentC Power is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  12.00  in CurrentC Power on August 30, 2024 and sell it today you would earn a total of  11.00  from holding CurrentC Power or generate 91.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Ackroo Inc  vs.  CurrentC Power

Ackroo Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ackroo Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ackroo is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

CurrentC Power

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ackroo and CurrentC Power

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

The idea behind Ackroo Inc and CurrentC Power 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.