Correlation Between Cookie and AE

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

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

Diversification Opportunities for Cookie and AE

-0.23

Correlation Coefficient

Cookie  AE

Very good diversification

The 3 months correlation between Cookie and AE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cookie and AE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AE and Cookie 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 Cookie are associated (or correlated) with AE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AE has no effect on the direction of Cookie i.e., Cookie and AE go up and down completely randomly.

Pair Corralation between Cookie and AE

Assuming the 90 days trading horizon Cookie is expected to generate 1.26 times more return on investment than AE. However, Cookie is 1.26 times more volatile than AE. It trades about 0.12 of its potential returns per unit of risk. AE is currently generating about -0.18 per unit of risk. If you would invest  12.00  in Cookie on April 20, 2025 and sell it today you would earn a total of  7.00  from holding Cookie or generate 58.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cookie  vs.  AE

Cookie

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cookie are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Cookie sustained solid returns over the last few months and may actually be approaching a breakup point.

AE

Risk-Adjusted Performance

Very Weak

Over the last 90 days AE 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 Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for AE shareholders.

Pair Trading with Cookie and AE

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

The idea behind Cookie and AE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.