Correlation Between AES and ACUTAAS CHEMICALS

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

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

Diversification Opportunities for AES and ACUTAAS CHEMICALS

0.16

Correlation Coefficient

AES  ACUTAAS CHEMICALS

Average diversification

The 3 months correlation between AES and ACUTAAS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding The AES and ACUTAAS CHEMICALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACUTAAS CHEMICALS LTD and AES 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 The AES are associated (or correlated) with ACUTAAS CHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACUTAAS CHEMICALS LTD has no effect on the direction of AES i.e., AES and ACUTAAS CHEMICALS go up and down completely randomly.

Pair Corralation between AES and ACUTAAS CHEMICALS

Considering the 90-day investment horizon The AES is expected to generate 1.63 times more return on investment than ACUTAAS CHEMICALS. However, AES is 1.63 times more volatile than ACUTAAS CHEMICALS LTD. It trades about 0.17 of its potential returns per unit of risk. ACUTAAS CHEMICALS LTD is currently generating about 0.19 per unit of risk. If you would invest  950.00  in The AES on May 22, 2025 and sell it today you would earn a total of  380.00  from holding The AES or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

The AES  vs.  ACUTAAS CHEMICALS LTD

AES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, AES unveiled solid returns over the last few months and may actually be approaching a breakup point.

ACUTAAS CHEMICALS LTD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ACUTAAS CHEMICALS LTD are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ACUTAAS CHEMICALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AES and ACUTAAS CHEMICALS

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

The idea behind The AES and ACUTAAS CHEMICALS LTD 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.