Correlation Between Fraser and AAC Clyde

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

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

Diversification Opportunities for Fraser and AAC Clyde

0.49

Correlation Coefficient

Fraser  AAC Clyde

Very weak diversification

The 3 months correlation between Fraser and AAC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fraser and Neave and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and Fraser 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 Fraser and Neave are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Fraser i.e., Fraser and AAC Clyde go up and down completely randomly.

Pair Corralation between Fraser and AAC Clyde

If you would invest  369.00  in Fraser and Neave on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Fraser and Neave or generate 0.0% return on investment over 90 days.

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

Fraser and Neave  vs.  AAC Clyde Space

Fraser and Neave

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fraser and Neave has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

AAC Clyde Space

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AAC Clyde Space has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Fraser and AAC Clyde

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

The idea behind Fraser and Neave and AAC Clyde Space 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.