Correlation Between Asia Pptys and Adler Group

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

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

Diversification Opportunities for Asia Pptys and Adler Group

-0.5

Correlation Coefficient

Asia Pptys  Adler Group

Very good diversification

The 3 months correlation between Asia and Adler is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pptys and Adler Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adler Group SA and Asia Pptys 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 Asia Pptys are associated (or correlated) with Adler Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adler Group SA has no effect on the direction of Asia Pptys i.e., Asia Pptys and Adler Group go up and down completely randomly.

Pair Corralation between Asia Pptys and Adler Group

Given the investment horizon of 90 days Asia Pptys is expected to generate 5.51 times more return on investment than Adler Group. However, Asia Pptys is 5.51 times more volatile than Adler Group SA. It trades about 0.1 of its potential returns per unit of risk. Adler Group SA is currently generating about -0.02 per unit of risk. If you would invest  1.71  in Asia Pptys on September 12, 2024 and sell it today you would earn a total of  3.29  from holding Asia Pptys or generate 192.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

Asia Pptys  vs.  Adler Group SA

Asia Pptys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pptys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Adler Group SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adler Group SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Adler Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asia Pptys and Adler Group

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

The idea behind Asia Pptys and Adler Group 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.