Correlation Between Avepoint Inc and Adobe Systems

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

Diversification Opportunities for Avepoint Inc and Adobe Systems

0.88
  Correlation Coefficient

Very poor diversification

The 12 months correlation between Avepoint and Adobe is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Avepoint Inc Cl and Adobe Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Systems and Avepoint Inc 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 Avepoint Inc Cl are associated (or correlated) with Adobe Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Systems has no effect on the direction of Avepoint Inc i.e., Avepoint Inc and Adobe Systems go up and down completely randomly.

Pair Corralation between Avepoint Inc and Adobe Systems

Given the investment horizon of 90 days Avepoint Inc Cl is expected to generate 0.65 times more return on investment than Adobe Systems. However, Avepoint Inc Cl is 1.53 times less risky than Adobe Systems. It trades about -0.18 of its potential returns per unit of risk. Adobe Systems is currently generating about -0.3 per unit of risk. If you would invest  469.00  in Avepoint Inc Cl on June 30, 2022 and sell it today you would lose (51.00)  from holding Avepoint Inc Cl or give up 10.87% of portfolio value over 90 days.
Time Period12 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Avepoint Inc Cl  vs.  Adobe Systems

 Performance (%) 
       Timeline  
Avepoint Inc Cl 
Avepoint Performance
0 of 100
Over the last 90 days Avepoint Inc Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Avepoint Price Channel

Adobe Systems 
Adobe Performance
0 of 100
Over the last 90 days Adobe Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Adobe Price Channel

Avepoint Inc and Adobe Systems Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Avepoint Inc and Adobe Systems

The main advantage of trading using opposite Avepoint Inc and Adobe Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avepoint Inc position performs unexpectedly, Adobe Systems 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 Adobe Systems will offset losses from the drop in Adobe Systems' long position.
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The idea behind Avepoint Inc Cl and Adobe Systems 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.
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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 CEO Directory module to screen CEOs from public companies around the world.

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