Correlation Between Azure Holding and Integrated Rail

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

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

Diversification Opportunities for Azure Holding and Integrated Rail

0.84

Correlation Coefficient

Azure Holding  Integrated Rail

Very poor diversification

The 3 months correlation between Azure and Integrated is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Integrated Rail and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Rail and Azure Holding 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 Azure Holding Group are associated (or correlated) with Integrated Rail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Rail has no effect on the direction of Azure Holding i.e., Azure Holding and Integrated Rail go up and down completely randomly.

Pair Corralation between Azure Holding and Integrated Rail

If you would invest  0.01  in Azure Holding Group on September 3, 2024 and sell it today you would earn a total of  23.99  from holding Azure Holding Group or generate 239900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

Azure Holding Group  vs.  Integrated Rail and

Azure Holding Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Integrated Rail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Rail and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Integrated Rail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Azure Holding and Integrated Rail

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

The idea behind Azure Holding Group and Integrated Rail and 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.