Correlation Between AAC Holdings and Advanced Accelerator

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

By analyzing existing cross correlation between AAC Holdings and Advanced Accelerator Applications, you can compare the effects of market volatilities on AAC Holdings and Advanced Accelerator 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 Advanced Accelerator. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Holdings and Advanced Accelerator.

Diversification Opportunities for AAC Holdings and Advanced Accelerator

0.0

Correlation Coefficient

AAC Holdings  Advanced Accelerator

Pay attention - limited upside

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

Pair Corralation between AAC Holdings and Advanced Accelerator

If you would invest (100.00) in Advanced Accelerator Applications on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Advanced Accelerator Applications 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.  Advanced Accelerator Applicati

AAC Holdings

Risk-Adjusted Performance

0 of 100

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Advanced Accelerator

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Accelerator Applications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Advanced Accelerator is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AAC Holdings and Advanced Accelerator

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

The idea behind AAC Holdings and Advanced Accelerator Applications 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.