Correlation Between FastPartner and Acrinova

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

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

Diversification Opportunities for FastPartner and Acrinova

-0.44

Correlation Coefficient

FastPartner  Acrinova

Very good diversification

The 3 months correlation between FastPartner and Acrinova is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding FastPartner AB Series and Acrinova AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrinova AB Series and FastPartner 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 FastPartner AB Series are associated (or correlated) with Acrinova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrinova AB Series has no effect on the direction of FastPartner i.e., FastPartner and Acrinova go up and down completely randomly.

Pair Corralation between FastPartner and Acrinova

Assuming the 90 days trading horizon FastPartner AB Series is expected to generate 0.64 times more return on investment than Acrinova. However, FastPartner AB Series is 1.57 times less risky than Acrinova. It trades about 0.04 of its potential returns per unit of risk. Acrinova AB Series is currently generating about 0.0 per unit of risk. If you would invest  7,039  in FastPartner AB Series on September 5, 2024 and sell it today you would earn a total of  121.00  from holding FastPartner AB Series or generate 1.72% return on investment over 90 days.

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

FastPartner AB Series  vs.  Acrinova AB Series

FastPartner AB Series

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FastPartner AB Series are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, FastPartner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Acrinova AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acrinova AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Acrinova is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FastPartner and Acrinova

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

The idea behind FastPartner AB Series and Acrinova AB Series 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.