Correlation Between Alpha Pro and Aaon

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

Diversification Opportunities for Alpha Pro and Aaon

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Alpha and Aaon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Pro Tech and Aaon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aaon Inc and Alpha Pro 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 Alpha Pro Tech are associated (or correlated) with Aaon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aaon Inc has no effect on the direction of Alpha Pro i.e., Alpha Pro and Aaon go up and down completely randomly.

Pair Corralation between Alpha Pro and Aaon

Considering the 90-day investment horizon Alpha Pro Tech is expected to under-perform the Aaon. In addition to that, Alpha Pro is 2.34 times more volatile than Aaon Inc. It trades about -0.04 of its total potential returns per unit of risk. Aaon Inc is currently generating about -0.01 per unit of volatility. If you would invest  6,492  in Aaon Inc on July 2, 2022 and sell it today you would lose (1,104)  from holding Aaon Inc or give up 17.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Alpha Pro Tech  vs.  Aaon Inc

 Performance (%) 
       Timeline  
Alpha Pro Tech 
Alpha Performance
0 of 100
Over the last 90 days Alpha Pro Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Alpha Price Channel

Aaon Inc 
Aaon Performance
0 of 100
Over the last 90 days Aaon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Aaon is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Aaon Price Channel

Alpha Pro and Aaon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alpha Pro and Aaon

The main advantage of trading using opposite Alpha Pro and Aaon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Pro position performs unexpectedly, Aaon 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 Aaon will offset losses from the drop in Aaon's long position.
Alpha Pro vs. Amazon Inc
The idea behind Alpha Pro Tech and Aaon Inc 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.
Aaon vs. Amazon Inc
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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