Correlation Between Ads Tec and Ault Alliance

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

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

Diversification Opportunities for Ads Tec and Ault Alliance

-0.79

Correlation Coefficient

Ads Tec  Ault Alliance

Pay attention - limited upside

The 3 months correlation between Ads and Ault is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ads Tec Energy and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance and Ads Tec 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 Ads Tec Energy are associated (or correlated) with Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of Ads Tec i.e., Ads Tec and Ault Alliance go up and down completely randomly.

Pair Corralation between Ads Tec and Ault Alliance

Given the investment horizon of 90 days Ads Tec Energy is expected to generate 0.15 times more return on investment than Ault Alliance. However, Ads Tec Energy is 6.75 times less risky than Ault Alliance. It trades about 0.32 of its potential returns per unit of risk. Ault Alliance is currently generating about -0.05 per unit of risk. If you would invest  1,011  in Ads Tec Energy on January 25, 2024 and sell it today you would earn a total of  79.00  from holding Ads Tec Energy or generate 7.81% return on investment over 90 days.

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

Ads Tec Energy  vs.  Ault Alliance

Ads Tec Energy

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ads Tec Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Ads Tec exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ault Alliance

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ads Tec and Ault Alliance

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

The idea behind Ads Tec Energy and Ault Alliance 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.