Correlation Between Aci Worldwide and Akamai Technologies

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

Diversification Opportunities for Aci Worldwide and Akamai Technologies

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Aci Worldwide and Akamai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aci Worldwide and Akamai Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies and Aci Worldwide 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 Aci Worldwide are associated (or correlated) with Akamai Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies has no effect on the direction of Aci Worldwide i.e., Aci Worldwide and Akamai Technologies go up and down completely randomly.

Pair Corralation between Aci Worldwide and Akamai Technologies

Given the investment horizon of 90 days Aci Worldwide is expected to generate 1.21 times more return on investment than Akamai Technologies. However, Aci Worldwide is 1.21 times more volatile than Akamai Technologies. It trades about -0.11 of its potential returns per unit of risk. Akamai Technologies is currently generating about -0.19 per unit of risk. If you would invest  2,773  in Aci Worldwide on April 6, 2022 and sell it today you would lose (186.00)  from holding Aci Worldwide or give up 6.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Aci Worldwide  vs.  Akamai Technologies

 Performance (%) 
      Timeline 
Aci Worldwide 
Aci Worldwide Performance
0 of 100
Over the last 90 days Aci Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Aci Worldwide is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Structure and Payout Changes

Last Split Factor
3:1
Last Split Date
2014-07-11

Aci Worldwide Price Channel

Akamai Technologies 
Akamai Performance
0 of 100
Over the last 90 days Akamai Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in August 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Akamai Price Channel

Aci Worldwide and Akamai Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Aci Worldwide and Akamai Technologies

The main advantage of trading using opposite Aci Worldwide and Akamai Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aci Worldwide position performs unexpectedly, Akamai Technologies 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 Akamai Technologies will offset losses from the drop in Akamai Technologies' long position.
The idea behind Aci Worldwide and Akamai Technologies 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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