Correlation Between A1 and United States

Can any of the company-specific risk be diversified away by investing in both A1 and United States 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 A1 and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A1 Group and United States Basketball, you can compare the effects of market volatilities on A1 and United States 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 A1 with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1 and United States.

Diversification Opportunities for A1 and United States

-0.66

Correlation Coefficient

A1  United States

Excellent diversification

The 3 months correlation between A1 and United is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding A1 Group and United States Basketball in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Basketball and A1 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 A1 Group are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Basketball has no effect on the direction of A1 i.e., A1 and United States go up and down completely randomly.

Pair Corralation between A1 and United States

If you would invest  27.00  in United States Basketball on September 4, 2024 and sell it today you would earn a total of  0.00  from holding United States Basketball or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

A1 Group  vs.  United States Basketball

A1 Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A1 Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

United States Basketball

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United States Basketball has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, United States is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with A1 and United States

The main advantage of trading using opposite A1 and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1 position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.

The idea behind A1 Group and United States Basketball 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.