Correlation Between Acm Research and Ideanomics

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

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

Diversification Opportunities for Acm Research and Ideanomics

-0.1

Correlation Coefficient

Acm Research  Ideanomics

Good diversification

The 3 months correlation between Acm and Ideanomics is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Acm Research and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics and Acm Research 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 Acm Research are associated (or correlated) with Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of Acm Research i.e., Acm Research and Ideanomics go up and down completely randomly.

Pair Corralation between Acm Research and Ideanomics

Given the investment horizon of 90 days Acm Research is expected to generate 0.72 times more return on investment than Ideanomics. However, Acm Research is 1.39 times less risky than Ideanomics. It trades about 0.13 of its potential returns per unit of risk. Ideanomics is currently generating about -0.06 per unit of risk. If you would invest  1,371  in Acm Research on January 25, 2024 and sell it today you would earn a total of  1,444  from holding Acm Research or generate 105.32% return on investment over 90 days.

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

Acm Research  vs.  Ideanomics

Acm Research

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Acm Research are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady primary indicators, Acm Research reported solid returns over the last few months and may actually be approaching a breakup point.

Ideanomics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Acm Research and Ideanomics

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

The idea behind Acm Research and Ideanomics 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.