Correlation Between AAA Technologies and Aptech

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

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

Diversification Opportunities for AAA Technologies and Aptech

0.26

Correlation Coefficient

AAA Technologies  Aptech

Modest diversification

The 3 months correlation between AAA and Aptech is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AAA Technologies Limited and Aptech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptech Limited and AAA Technologies 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 AAA Technologies Limited are associated (or correlated) with Aptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptech Limited has no effect on the direction of AAA Technologies i.e., AAA Technologies and Aptech go up and down completely randomly.

Pair Corralation between AAA Technologies and Aptech

Assuming the 90 days trading horizon AAA Technologies Limited is expected to generate 0.61 times more return on investment than Aptech. However, AAA Technologies Limited is 1.64 times less risky than Aptech. It trades about 0.14 of its potential returns per unit of risk. Aptech Limited is currently generating about 0.06 per unit of risk. If you would invest  7,885  in AAA Technologies Limited on April 22, 2025 and sell it today you would earn a total of  1,594  from holding AAA Technologies Limited or generate 20.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AAA Technologies Limited  vs.  Aptech Limited

AAA Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAA Technologies Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, AAA Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Aptech Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptech Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Aptech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AAA Technologies and Aptech

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

The idea behind AAA Technologies Limited and Aptech Limited 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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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.