Correlation Between Ault Alliance and Tritium Dcfc

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

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

Diversification Opportunities for Ault Alliance and Tritium Dcfc

0.65

Correlation Coefficient

Ault Alliance  Tritium Dcfc

Poor diversification

The 3 months correlation between Ault and Tritium is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ault Alliance and Tritium Dcfc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tritium Dcfc and Ault Alliance 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 Ault Alliance are associated (or correlated) with Tritium Dcfc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tritium Dcfc has no effect on the direction of Ault Alliance i.e., Ault Alliance and Tritium Dcfc go up and down completely randomly.

Pair Corralation between Ault Alliance and Tritium Dcfc

Given the investment horizon of 90 days Ault Alliance is expected to generate 0.58 times more return on investment than Tritium Dcfc. However, Ault Alliance is 1.73 times less risky than Tritium Dcfc. It trades about -0.43 of its potential returns per unit of risk. Tritium Dcfc is currently generating about -0.73 per unit of risk. If you would invest  38.00  in Ault Alliance on January 20, 2024 and sell it today you would lose (14.00) from holding Ault Alliance or give up 36.84% of portfolio value over 90 days.

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

Ault Alliance  vs.  Tritium Dcfc

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 conflicting 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.

Tritium Dcfc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tritium Dcfc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ault Alliance and Tritium Dcfc

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

The idea behind Ault Alliance and Tritium Dcfc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.