Correlation Between TaTaTu SpA and Akwel SA

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

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

Diversification Opportunities for TaTaTu SpA and Akwel SA

0.0

Correlation Coefficient

TaTaTu SpA  Akwel SA

Pay attention - limited upside

The 3 months correlation between TaTaTu and Akwel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TaTaTu SpA and Akwel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akwel SA and TaTaTu SpA 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 TaTaTu SpA are associated (or correlated) with Akwel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akwel SA has no effect on the direction of TaTaTu SpA i.e., TaTaTu SpA and Akwel SA go up and down completely randomly.

Pair Corralation between TaTaTu SpA and Akwel SA

Assuming the 90 days trading horizon TaTaTu SpA is expected to generate 0.75 times more return on investment than Akwel SA. However, TaTaTu SpA is 1.33 times less risky than Akwel SA. It trades about -0.05 of its potential returns per unit of risk. Akwel SA is currently generating about -0.07 per unit of risk. If you would invest  870.00  in TaTaTu SpA on September 27, 2024 and sell it today you would lose (325.00) from holding TaTaTu SpA or give up 37.36% of portfolio value over 90 days.

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

TaTaTu SpA  vs.  Akwel SA

TaTaTu SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TaTaTu SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, TaTaTu SpA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Akwel SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akwel SA 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TaTaTu SpA and Akwel SA

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

The idea behind TaTaTu SpA and Akwel SA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.