Correlation Between AAP and ProConcept Marketing

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

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

Diversification Opportunities for AAP and ProConcept Marketing

-0.07

Correlation Coefficient

AAP  ProConcept Marketing

Good diversification

The 3 months correlation between AAP and ProConcept is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AAP Inc and ProConcept Marketing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProConcept Marketing and AAP 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 AAP Inc are associated (or correlated) with ProConcept Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProConcept Marketing has no effect on the direction of AAP i.e., AAP and ProConcept Marketing go up and down completely randomly.

Pair Corralation between AAP and ProConcept Marketing

Given the investment horizon of 90 days AAP Inc is expected to generate 0.81 times more return on investment than ProConcept Marketing. However, AAP Inc is 1.24 times less risky than ProConcept Marketing. It trades about 0.04 of its potential returns per unit of risk. ProConcept Marketing Group is currently generating about -0.01 per unit of risk. If you would invest  0.02  in AAP Inc on May 2, 2025 and sell it today you would lose (0.01) from holding AAP Inc or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

AAP Inc  vs.  ProConcept Marketing Group

AAP Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AAP Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, AAP revealed solid returns over the last few months and may actually be approaching a breakup point.

ProConcept Marketing

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProConcept Marketing Group 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 very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with AAP and ProConcept Marketing

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

The idea behind AAP Inc and ProConcept Marketing Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.