Correlation Between Altus Power and Aeroclean Technologies

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

Diversification Opportunities for Altus Power and Aeroclean Technologies

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Altus and Aeroclean is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Aeroclean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroclean Technologies and Altus Power 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 Altus Power are associated (or correlated) with Aeroclean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroclean Technologies has no effect on the direction of Altus Power i.e., Altus Power and Aeroclean Technologies go up and down completely randomly.

Pair Corralation between Altus Power and Aeroclean Technologies

Given the investment horizon of 90 days Altus Power is expected to under-perform the Aeroclean Technologies. But the etf apears to be less risky and, when comparing its historical volatility, Altus Power is 1.12 times less risky than Aeroclean Technologies. The etf trades about -0.28 of its potential returns per unit of risk. The Aeroclean Technologies is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  351.00  in Aeroclean Technologies on August 28, 2022 and sell it today you would lose (13.00)  from holding Aeroclean Technologies or give up 3.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Altus Power  vs.  Aeroclean Technologies

 Performance (%) 
       Timeline  
Altus Power 
Altus Performance
0 of 100
Over the last 90 days Altus Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Altus Price Channel

Aeroclean Technologies 
Aeroclean Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aeroclean Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aeroclean Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Aeroclean Price Channel

Altus Power and Aeroclean Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altus Power and Aeroclean Technologies

The main advantage of trading using opposite Altus Power and Aeroclean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Aeroclean 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 Aeroclean Technologies will offset losses from the drop in Aeroclean Technologies' long position.
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The idea behind Altus Power and Aeroclean 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.
Aeroclean Technologies vs. RLX Technology
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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