Correlation Between Alight and Amesite Operating

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

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

Diversification Opportunities for Alight and Amesite Operating

-0.11

Correlation Coefficient

Alight  Amesite Operating

Good diversification

The 3 months correlation between Alight and Amesite is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Alight Inc and Amesite Operating Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amesite Operating and Alight 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 Alight Inc are associated (or correlated) with Amesite Operating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amesite Operating has no effect on the direction of Alight i.e., Alight and Amesite Operating go up and down completely randomly.

Pair Corralation between Alight and Amesite Operating

Given the investment horizon of 90 days Alight is expected to generate 624.86 times less return on investment than Amesite Operating. But when comparing it to its historical volatility, Alight Inc is 3.88 times less risky than Amesite Operating. It trades about 0.0 of its potential returns per unit of risk. Amesite Operating Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  239.00  in Amesite Operating Co on September 14, 2024 and sell it today you would earn a total of  153.00  from holding Amesite Operating Co or generate 64.02% return on investment over 90 days.

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

Alight Inc  vs.  Amesite Operating Co

Alight Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alight Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Alight is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Amesite Operating

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amesite Operating Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amesite Operating unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alight and Amesite Operating

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

The idea behind Alight Inc and Amesite Operating Co 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.