Correlation Between AdEx and AC Milan

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both AdEx and AC Milan 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 AdEx and AC Milan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdEx and AC Milan Fan, you can compare the effects of market volatilities on AdEx and AC Milan 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 AdEx with a short position of AC Milan. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdEx and AC Milan.

Diversification Opportunities for AdEx and AC Milan

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between AdEx and AC Milan is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AdEx and AC Milan Fan Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC Milan Fan and AdEx 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 AdEx are associated (or correlated) with AC Milan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC Milan Fan has no effect on the direction of AdEx i.e., AdEx and AC Milan go up and down completely randomly.

Pair Corralation between AdEx and AC Milan

Assuming the 90 days trading horizon AdEx is expected to under-perform the AC Milan. But the crypto coin apears to be less risky and, when comparing its historical volatility, AdEx is 1.7 times less risky than AC Milan. The crypto coin trades about -0.16 of its potential returns per unit of risk. The AC Milan Fan is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  692.00  in AC Milan Fan on February 19, 2022 and sell it today you would lose (169.00)  from holding AC Milan Fan or give up 24.42% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.57%
ValuesDaily Returns

AdEx  vs.  AC Milan Fan Token

 Performance (%) 
      Timeline 
AdEx 
AdEx Performance
0 of 100
Over the last 90 days AdEx has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for AdEx investors.

AdEx Price Channel

AC Milan Fan 
AC Milan Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AC Milan Fan are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, AC Milan sustained solid returns over the last few months and may actually be approaching a breakup point.

AC Milan Price Channel

AdEx and AC Milan Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AdEx and AC Milan

The main advantage of trading using opposite AdEx and AC Milan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdEx position performs unexpectedly, AC Milan 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 AC Milan will offset losses from the drop in AC Milan's long position.
The idea behind AdEx and AC Milan Fan 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go