Correlation Between Associated Capital and Equinix

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Can any of the company-specific risk be diversified away by investing in both Associated Capital and Equinix 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 Associated Capital and Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Equinix, you can compare the effects of market volatilities on Associated Capital and Equinix 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 Associated Capital with a short position of Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Equinix.

Diversification Opportunities for Associated Capital and Equinix

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Associated and Equinix is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix and Associated Capital 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 Associated Capital Group are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Associated Capital i.e., Associated Capital and Equinix go up and down completely randomly.

Pair Corralation between Associated Capital and Equinix

Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.26 times more return on investment than Equinix. However, Associated Capital is 1.26 times more volatile than Equinix. It trades about 0.01 of its potential returns per unit of risk. Equinix is currently generating about -0.02 per unit of risk. If you would invest  3,549  in Associated Capital Group on June 27, 2022 and sell it today you would earn a total of  41.00  from holding Associated Capital Group or generate 1.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Associated Capital Group  vs.  Equinix

 Performance (%) 
       Timeline  
Associated Capital 
Associated Performance
0 of 100
Over the last 90 days Associated Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Associated Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Associated Price Channel

Equinix 
Equinix Performance
0 of 100
Over the last 90 days Equinix 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 forward indicators remain fairly strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Equinix Price Channel

Associated Capital and Equinix Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Associated Capital and Equinix

The main advantage of trading using opposite Associated Capital and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.
Associated Capital vs. Industrias Bachoco SA
The idea behind Associated Capital Group and Equinix 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.
Equinix vs. Industrias Bachoco SA
Check out your portfolio center. 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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