Correlation Between Ackroo and Wishpond Technologies

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

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

Diversification Opportunities for Ackroo and Wishpond Technologies

-0.04

Correlation Coefficient

Ackroo  Wishpond Technologies

Good diversification

The 3 months correlation between Ackroo and Wishpond is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ackroo Inc and Wishpond Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wishpond Technologies 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 Wishpond Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wishpond Technologies has no effect on the direction of Ackroo i.e., Ackroo and Wishpond Technologies go up and down completely randomly.

Pair Corralation between Ackroo and Wishpond Technologies

Assuming the 90 days horizon Ackroo Inc is expected to generate 0.79 times more return on investment than Wishpond Technologies. However, Ackroo Inc is 1.26 times less risky than Wishpond Technologies. It trades about 0.01 of its potential returns per unit of risk. Wishpond Technologies is currently generating about -0.07 per unit of risk. If you would invest  9.00  in Ackroo Inc on September 14, 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	98.44%
Values	Daily Returns

Ackroo Inc  vs.  Wishpond Technologies

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.

Wishpond Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wishpond Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental 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 Wishpond Technologies

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

The idea behind Ackroo Inc and Wishpond Technologies 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.