Correlation Between AA Mission and Expand Energy

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

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

Diversification Opportunities for AA Mission and Expand Energy

-0.77

Correlation Coefficient

AA Mission  Expand Energy

Pay attention - limited upside

The 3 months correlation between AAM and Expand is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AA Mission Acquisition and Expand Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expand Energy and AA Mission 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 AA Mission Acquisition are associated (or correlated) with Expand Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expand Energy has no effect on the direction of AA Mission i.e., AA Mission and Expand Energy go up and down completely randomly.

Pair Corralation between AA Mission and Expand Energy

Considering the 90-day investment horizon AA Mission Acquisition is expected to generate 0.07 times more return on investment than Expand Energy. However, AA Mission Acquisition is 13.5 times less risky than Expand Energy. It trades about 0.05 of its potential returns per unit of risk. Expand Energy is currently generating about -0.14 per unit of risk. If you would invest  1,042  in AA Mission Acquisition on May 28, 2025 and sell it today you would earn a total of  5.00  from holding AA Mission Acquisition or generate 0.48% return on investment over 90 days.

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

AA Mission Acquisition  vs.  Expand Energy

AA Mission Acquisition

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in AA Mission Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AA Mission is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Expand Energy

Risk-Adjusted Performance

Weakest

Over the last 90 days Expand Energy 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 basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with AA Mission and Expand Energy

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

The idea behind AA Mission Acquisition and Expand Energy 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.