Correlation Between Aristotlesaul Global and Aristotle International

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

By analyzing existing cross correlation between Aristotlesaul Global Eq and Aristotle International Eq, you can compare the effects of market volatilities on Aristotlesaul Global and Aristotle International 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 Aristotlesaul Global with a short position of Aristotle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotlesaul Global and Aristotle International.

Diversification Opportunities for Aristotlesaul Global and Aristotle International

0.28

Correlation Coefficient

Aristotlesaul Global  Aristotle International

Modest diversification

The 3 months correlation between Aristotlesaul and Aristotle is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aristotlesaul Global Eq and Aristotle International Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle International and Aristotlesaul Global 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 Aristotlesaul Global Eq are associated (or correlated) with Aristotle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle International has no effect on the direction of Aristotlesaul Global i.e., Aristotlesaul Global and Aristotle International go up and down completely randomly.

Pair Corralation between Aristotlesaul Global and Aristotle International

Assuming the 90 days horizon Aristotlesaul Global Eq is expected to under-perform the Aristotle International. In addition to that, Aristotlesaul Global is 4.69 times more volatile than Aristotle International Eq. It trades about -0.14 of its total potential returns per unit of risk. Aristotle International Eq is currently generating about -0.07 per unit of volatility. If you would invest  1,107  in Aristotle International Eq on September 19, 2024 and sell it today you would lose (35.00) from holding Aristotle International Eq or give up 3.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aristotlesaul Global Eq  vs.  Aristotle International Eq

Aristotlesaul Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aristotlesaul Global Eq has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly 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 fund investors.

Aristotle International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aristotle International Eq has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Aristotle International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aristotlesaul Global and Aristotle International

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

The idea behind Aristotlesaul Global Eq and Aristotle International Eq 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.