Correlation Between AES and K2 Alternative

Can any of the company-specific risk be diversified away by investing in both AES and K2 Alternative 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 K2 Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The AES and K2 Alternative Strategies, you can compare the effects of market volatilities on AES and K2 Alternative 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 K2 Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and K2 Alternative.

Diversification Opportunities for AES and K2 Alternative

0.91

Correlation Coefficient

AES  K2 Alternative

Almost no diversification

The 3 months correlation between AES and FSKKX is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding The AES and K2 Alternative Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Alternative Strategies 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 K2 Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Alternative Strategies has no effect on the direction of AES i.e., AES and K2 Alternative go up and down completely randomly.

Pair Corralation between AES and K2 Alternative

Considering the 90-day investment horizon The AES is expected to generate 17.36 times more return on investment than K2 Alternative. However, AES is 17.36 times more volatile than K2 Alternative Strategies. It trades about 0.16 of its potential returns per unit of risk. K2 Alternative Strategies is currently generating about 0.23 per unit of risk. If you would invest  994.00  in The AES on May 26, 2025 and sell it today you would earn a total of  355.00  from holding The AES or generate 35.71% return on investment over 90 days.

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

The AES  vs.  K2 Alternative Strategies

AES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 12 (%) 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.

K2 Alternative Strategies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in K2 Alternative Strategies are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, K2 Alternative is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AES and K2 Alternative

The main advantage of trading using opposite AES and K2 Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, K2 Alternative 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 K2 Alternative will offset losses from the drop in K2 Alternative's long position.

The idea behind The AES and K2 Alternative Strategies 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.