Correlation Between Optima Prima and Aesler Grup

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

By analyzing existing cross correlation between Optima Prima Metal and Aesler Grup Internasional, you can compare the effects of market volatilities on Optima Prima and Aesler Grup 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 Optima Prima with a short position of Aesler Grup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and Aesler Grup.

Diversification Opportunities for Optima Prima and Aesler Grup

-0.64

Correlation Coefficient

Optima Prima  Aesler Grup

Excellent diversification

The 3 months correlation between Optima and Aesler is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal and Aesler Grup Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesler Grup Internasional and Optima Prima 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 Optima Prima Metal are associated (or correlated) with Aesler Grup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesler Grup Internasional has no effect on the direction of Optima Prima i.e., Optima Prima and Aesler Grup go up and down completely randomly.

Pair Corralation between Optima Prima and Aesler Grup

Assuming the 90 days trading horizon Optima Prima Metal is expected to under-perform the Aesler Grup. But the stock apears to be less risky and, when comparing its historical volatility, Optima Prima Metal is 3.57 times less risky than Aesler Grup. The stock trades about -0.15 of its potential returns per unit of risk. The Aesler Grup Internasional is currently generating about 1.54 of returns per unit of risk over similar time horizon. If you would invest  40,000  in Aesler Grup Internasional on September 18, 2024 and sell it today you would earn a total of  121,000  from holding Aesler Grup Internasional or generate 302.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Optima Prima Metal  vs.  Aesler Grup Internasional

Optima Prima Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Optima Prima Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aesler Grup Internasional

Risk-Adjusted Performance

60 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Aesler Grup Internasional are ranked lower than 60 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Aesler Grup disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optima Prima and Aesler Grup

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

The idea behind Optima Prima Metal and Aesler Grup Internasional 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.