Correlation Between AERWINS Technologies and Coherent

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

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

Diversification Opportunities for AERWINS Technologies and Coherent

-0.53

Correlation Coefficient

AERWINS Technologies  Coherent

Excellent diversification

The 3 months correlation between AERWINS and Coherent is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AERWINS Technologies and Coherent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coherent and AERWINS Technologies 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 AERWINS Technologies are associated (or correlated) with Coherent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coherent has no effect on the direction of AERWINS Technologies i.e., AERWINS Technologies and Coherent go up and down completely randomly.

Pair Corralation between AERWINS Technologies and Coherent

Given the investment horizon of 90 days AERWINS Technologies is expected to under-perform the Coherent. In addition to that, AERWINS Technologies is 4.28 times more volatile than Coherent. It trades about -0.03 of its total potential returns per unit of risk. Coherent is currently generating about 0.08 per unit of volatility. If you would invest  4,104  in Coherent on September 2, 2024 and sell it today you would earn a total of  5,912  from holding Coherent or generate 144.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	69.89%
Values	Daily Returns

AERWINS Technologies  vs.  Coherent

AERWINS Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AERWINS Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, AERWINS Technologies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Coherent

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Coherent are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical indicators, Coherent reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AERWINS Technologies and Coherent

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

The idea behind AERWINS Technologies and Coherent 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.