Correlation Between ARHT Media and Ackroo

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

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

Diversification Opportunities for ARHT Media and Ackroo

-0.07

Correlation Coefficient

ARHT Media  Ackroo

Good diversification

The 3 months correlation between ARHT and Ackroo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ARHT Media and Ackroo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ackroo Inc and ARHT Media 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 ARHT Media are associated (or correlated) with Ackroo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ackroo Inc has no effect on the direction of ARHT Media i.e., ARHT Media and Ackroo go up and down completely randomly.

Pair Corralation between ARHT Media and Ackroo

Assuming the 90 days horizon ARHT Media is expected to generate 0.82 times more return on investment than Ackroo. However, ARHT Media is 1.21 times less risky than Ackroo. It trades about 0.05 of its potential returns per unit of risk. Ackroo Inc is currently generating about 0.01 per unit of risk. If you would invest  1.30  in ARHT Media on September 13, 2024 and sell it today you would earn a total of  0.09  from holding ARHT Media or generate 6.92% return on investment over 90 days.

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

ARHT Media  vs.  Ackroo Inc

ARHT Media

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ARHT Media are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ARHT Media may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ARHT Media and Ackroo

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

The idea behind ARHT Media and Ackroo Inc 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.