Correlation Between Croda International and AdvancedAdvT

Can any of the company-specific risk be diversified away by investing in both Croda International and AdvancedAdvT 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 Croda International and AdvancedAdvT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Croda International Plc and AdvancedAdvT, you can compare the effects of market volatilities on Croda International and AdvancedAdvT 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 Croda International with a short position of AdvancedAdvT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Croda International and AdvancedAdvT.

Diversification Opportunities for Croda International and AdvancedAdvT

0.0

Correlation Coefficient

Croda International  AdvancedAdvT

Pay attention - limited upside

The 3 months correlation between Croda and AdvancedAdvT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Croda International Plc and AdvancedAdvT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvancedAdvT and Croda International 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 Croda International Plc are associated (or correlated) with AdvancedAdvT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvancedAdvT has no effect on the direction of Croda International i.e., Croda International and AdvancedAdvT go up and down completely randomly.

Pair Corralation between Croda International and AdvancedAdvT

If you would invest  15,000  in AdvancedAdvT on April 23, 2025 and sell it today you would earn a total of  3,250  from holding AdvancedAdvT or generate 21.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Croda International Plc  vs.  AdvancedAdvT

Croda International Plc

Risk-Adjusted Performance

OK

Over the last 90 days Croda International Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Croda International is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

AdvancedAdvT

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AdvancedAdvT are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AdvancedAdvT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Croda International and AdvancedAdvT

The main advantage of trading using opposite Croda International and AdvancedAdvT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Croda International position performs unexpectedly, AdvancedAdvT 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 AdvancedAdvT will offset losses from the drop in AdvancedAdvT's long position.

The idea behind Croda International Plc and AdvancedAdvT 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 the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.