Correlation Between Scottish Mortgage and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage and AECOM TECHNOLOGY 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 Scottish Mortgage and AECOM TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and AECOM TECHNOLOGY, you can compare the effects of market volatilities on Scottish Mortgage and AECOM TECHNOLOGY 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 Scottish Mortgage with a short position of AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and AECOM TECHNOLOGY.
Diversification Opportunities for Scottish Mortgage and AECOM TECHNOLOGY
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scottish and AECOM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY and Scottish Mortgage 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 Scottish Mortgage Investment are associated (or correlated) with AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between Scottish Mortgage and AECOM TECHNOLOGY
Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.73 times more return on investment than AECOM TECHNOLOGY. However, Scottish Mortgage Investment is 1.37 times less risky than AECOM TECHNOLOGY. It trades about 0.2 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.09 per unit of risk. If you would invest 1,027 in Scottish Mortgage Investment on October 14, 2024 and sell it today you would earn a total of 156.00 from holding Scottish Mortgage Investment or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. AECOM TECHNOLOGY
Performance |
| Timeline |
| Scottish Mortgage |
| AECOM TECHNOLOGY |
Scottish Mortgage and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and AECOM TECHNOLOGY
The main advantage of trading using opposite Scottish Mortgage and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| Scottish Mortgage vs. CARSALESCOM | Scottish Mortgage vs. SINGAPORE AIRLINES | Scottish Mortgage vs. American Airlines Group | Scottish Mortgage vs. PLAYTECH |
| AECOM TECHNOLOGY vs. Scottish Mortgage Investment | AECOM TECHNOLOGY vs. SEI INVESTMENTS | AECOM TECHNOLOGY vs. CHRYSALIS INVESTMENTS LTD | AECOM TECHNOLOGY vs. WisdomTree Investments |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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