Correlation Between AAC Holdings and Altana Aktiengesellscha

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

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

Diversification Opportunities for AAC Holdings and Altana Aktiengesellscha

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Correlation Coefficient

AAC Holdings  Altana Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between AAC and Altana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AAC Holdings and Altana Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altana Aktiengesellschaft and AAC Holdings 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 AAC Holdings are associated (or correlated) with Altana Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altana Aktiengesellschaft has no effect on the direction of AAC Holdings i.e., AAC Holdings and Altana Aktiengesellscha go up and down completely randomly.

Pair Corralation between AAC Holdings and Altana Aktiengesellscha

If you would invest (100.00) in Altana Aktiengesellschaft on January 17, 2024 and sell it today you would earn a total of  100.00  from holding Altana Aktiengesellschaft or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AAC Holdings  vs.  Altana Aktiengesellschaft

AAC Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days AAC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, AAC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Altana Aktiengesellschaft

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altana Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Altana Aktiengesellscha is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AAC Holdings and Altana Aktiengesellscha

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

The idea behind AAC Holdings and Altana Aktiengesellschaft 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.