Correlation Between Ackroo and Advanced Health

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

By analyzing existing cross correlation between Ackroo Inc and Advanced Health Intelligence, you can compare the effects of market volatilities on Ackroo and Advanced Health 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 Advanced Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ackroo and Advanced Health.

Diversification Opportunities for Ackroo and Advanced Health

-0.29

Correlation Coefficient

Ackroo  Advanced Health

Very good diversification

The 3 months correlation between Ackroo and Advanced is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ackroo Inc and Advanced Health Intelligence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Health Inte 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 Advanced Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Health Inte has no effect on the direction of Ackroo i.e., Ackroo and Advanced Health go up and down completely randomly.

Pair Corralation between Ackroo and Advanced Health

Assuming the 90 days horizon Ackroo Inc is expected to generate 1.13 times more return on investment than Advanced Health. However, Ackroo is 1.13 times more volatile than Advanced Health Intelligence. It trades about 0.01 of its potential returns per unit of risk. Advanced Health Intelligence is currently generating about -0.18 per unit of risk. If you would invest  9.00  in Ackroo Inc on September 13, 2024 and sell it today you would lose (0.39) from holding Ackroo Inc or give up 4.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ackroo Inc  vs.  Advanced Health Intelligence

Ackroo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ackroo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Advanced Health Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Health Intelligence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating 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.

Pair Trading with Ackroo and Advanced Health

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

The idea behind Ackroo Inc and Advanced Health Intelligence 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.