Correlation Between Aadi Bioscience and Altana Aktiengesellscha

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

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

Diversification Opportunities for Aadi Bioscience and Altana Aktiengesellscha

0.0

Correlation Coefficient

Aadi Bioscience  Altana Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between Aadi and Altana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aadi Bioscience and Altana Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altana Aktiengesellschaft and Aadi Bioscience 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 Aadi Bioscience 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 Aadi Bioscience i.e., Aadi Bioscience and Altana Aktiengesellscha go up and down completely randomly.

Pair Corralation between Aadi Bioscience and Altana Aktiengesellscha

If you would invest (100.00) in Altana Aktiengesellschaft on January 26, 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	0.0%
Values	Daily Returns

Aadi Bioscience  vs.  Altana Aktiengesellschaft

Aadi Bioscience

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aadi Bioscience are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Aadi Bioscience demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aadi Bioscience and Altana Aktiengesellscha

The main advantage of trading using opposite Aadi Bioscience and Altana Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aadi Bioscience 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 Aadi Bioscience 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.