Correlation Between Masterflex and AAC TECHNOLOGHLDGADR

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

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

Diversification Opportunities for Masterflex and AAC TECHNOLOGHLDGADR

-0.52

Correlation Coefficient

Masterflex  AAC TECHNOLOGHLDGADR

Excellent diversification

The 3 months correlation between Masterflex and AAC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Masterflex SE and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and Masterflex 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 Masterflex SE are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Masterflex i.e., Masterflex and AAC TECHNOLOGHLDGADR go up and down completely randomly.

Pair Corralation between Masterflex and AAC TECHNOLOGHLDGADR

Assuming the 90 days trading horizon Masterflex is expected to generate 8.56 times less return on investment than AAC TECHNOLOGHLDGADR. But when comparing it to its historical volatility, Masterflex SE is 1.55 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.02 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  183.00  in AAC TECHNOLOGHLDGADR on September 1, 2024 and sell it today you would earn a total of  223.00  from holding AAC TECHNOLOGHLDGADR or generate 121.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.08%
Values	Daily Returns

Masterflex SE  vs.  AAC TECHNOLOGHLDGADR

Masterflex SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Masterflex SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

AAC TECHNOLOGHLDGADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AAC TECHNOLOGHLDGADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AAC TECHNOLOGHLDGADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Masterflex and AAC TECHNOLOGHLDGADR

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

The idea behind Masterflex SE and AAC TECHNOLOGHLDGADR 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.