Correlation Between Aedas Homes and WideOpenWest
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and WideOpenWest 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 Aedas Homes and WideOpenWest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and WideOpenWest, you can compare the effects of market volatilities on Aedas Homes and WideOpenWest 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 Aedas Homes with a short position of WideOpenWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and WideOpenWest.
Diversification Opportunities for Aedas Homes and WideOpenWest
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aedas and WideOpenWest is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and WideOpenWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WideOpenWest and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with WideOpenWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WideOpenWest has no effect on the direction of Aedas Homes i.e., Aedas Homes and WideOpenWest go up and down completely randomly.
Pair Corralation between Aedas Homes and WideOpenWest
Assuming the 90 days horizon Aedas Homes SA is expected to under-perform the WideOpenWest. But the stock apears to be less risky and, when comparing its historical volatility, Aedas Homes SA is 2.09 times less risky than WideOpenWest. The stock trades about -0.1 of its potential returns per unit of risk. The WideOpenWest is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 412.00 in WideOpenWest on November 27, 2024 and sell it today you would earn a total of 40.00 from holding WideOpenWest or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. WideOpenWest
Performance |
| Timeline |
| Aedas Homes SA |
| WideOpenWest |
Aedas Homes and WideOpenWest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and WideOpenWest
The main advantage of trading using opposite Aedas Homes and WideOpenWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, WideOpenWest 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 WideOpenWest will offset losses from the drop in WideOpenWest's long position.| Aedas Homes vs. HANOVER INSURANCE | Aedas Homes vs. INFORMATION SVC GRP | Aedas Homes vs. Data Modul AG | Aedas Homes vs. VIENNA INSURANCE GR |
| WideOpenWest vs. Information Services International Dentsu | WideOpenWest vs. De Grey Mining | WideOpenWest vs. Datalogic SpA | WideOpenWest vs. MINCO SILVER |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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