Correlation Between Akoustis Technologies and Adobe

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

By analyzing existing cross correlation between Akoustis Technologies and Adobe 19 percent, you can compare the effects of market volatilities on Akoustis Technologies and Adobe 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 Akoustis Technologies with a short position of Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akoustis Technologies and Adobe.

Diversification Opportunities for Akoustis Technologies and Adobe

-0.61

Correlation Coefficient

Akoustis Technologies  Adobe

Excellent diversification

The 3 months correlation between Akoustis and Adobe is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Akoustis Technologies and Adobe 19 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe 19 percent and Akoustis Technologies 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 Akoustis Technologies are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe 19 percent has no effect on the direction of Akoustis Technologies i.e., Akoustis Technologies and Adobe go up and down completely randomly.

Pair Corralation between Akoustis Technologies and Adobe

Given the investment horizon of 90 days Akoustis Technologies is expected to generate 14.3 times more return on investment than Adobe. However, Akoustis Technologies is 14.3 times more volatile than Adobe 19 percent. It trades about 0.07 of its potential returns per unit of risk. Adobe 19 percent is currently generating about -0.1 per unit of risk. If you would invest  8.45  in Akoustis Technologies on September 1, 2024 and sell it today you would earn a total of  1.55  from holding Akoustis Technologies or generate 18.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.06%
Values	Daily Returns

Akoustis Technologies  vs.  Adobe 19 percent

Akoustis Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Akoustis Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Akoustis Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Adobe 19 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adobe 19 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Adobe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Akoustis Technologies and Adobe

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

The idea behind Akoustis Technologies and Adobe 19 percent 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.