Correlation Between Central Puerto and Aeroclean Technologies

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

Diversification Opportunities for Central Puerto and Aeroclean Technologies

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Central and Aeroclean is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Central Puerto SA and Aeroclean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroclean Technologies and Central Puerto 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 Central Puerto SA 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 Central Puerto i.e., Central Puerto and Aeroclean Technologies go up and down completely randomly.

Pair Corralation between Central Puerto and Aeroclean Technologies

Given the investment horizon of 90 days Central Puerto SA is expected to generate 0.56 times more return on investment than Aeroclean Technologies. However, Central Puerto SA is 1.78 times less risky than Aeroclean Technologies. It trades about 0.18 of its potential returns per unit of risk. Aeroclean Technologies is currently generating about 0.09 per unit of risk. If you would invest  491.00  in Central Puerto SA on September 1, 2022 and sell it today you would earn a total of  63.00  from holding Central Puerto SA or generate 12.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Central Puerto SA  vs.  Aeroclean Technologies

 Performance (%) 
       Timeline  
Central Puerto SA 
Central Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Central Puerto SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Central Puerto unveiled solid returns over the last few months and may actually be approaching a breakup point.

Central Price Channel

Aeroclean Technologies 
Aeroclean Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aeroclean Technologies are ranked lower than 4 (%) 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

Central Puerto and Aeroclean Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Central Puerto and Aeroclean Technologies

The main advantage of trading using opposite Central Puerto and Aeroclean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Puerto 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 Central Puerto SA 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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