Correlation Between ENTREPARTICULIERS and Aon PLC
Can any of the company-specific risk be diversified away by investing in both ENTREPARTICULIERS and Aon PLC 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 ENTREPARTICULIERS and Aon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENTREPARTICULIERS EO 10 and Aon PLC, you can compare the effects of market volatilities on ENTREPARTICULIERS and Aon PLC 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 ENTREPARTICULIERS with a short position of Aon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTREPARTICULIERS and Aon PLC.
Diversification Opportunities for ENTREPARTICULIERS and Aon PLC
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ENTREPARTICULIERS and Aon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ENTREPARTICULIERS EO 10 and Aon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aon PLC and ENTREPARTICULIERS 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 ENTREPARTICULIERS EO 10 are associated (or correlated) with Aon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aon PLC has no effect on the direction of ENTREPARTICULIERS i.e., ENTREPARTICULIERS and Aon PLC go up and down completely randomly.
Pair Corralation between ENTREPARTICULIERS and Aon PLC
Assuming the 90 days horizon ENTREPARTICULIERS EO 10 is expected to under-perform the Aon PLC. In addition to that, ENTREPARTICULIERS is 3.61 times more volatile than Aon PLC. It trades about -0.05 of its total potential returns per unit of risk. Aon PLC is currently generating about 0.04 per unit of volatility. If you would invest 28,315 in Aon PLC on October 27, 2024 and sell it today you would earn a total of 6,395 from holding Aon PLC or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENTREPARTICULIERS EO 10 vs. Aon PLC
Performance |
| Timeline |
| ENTREPARTICULIERS EO |
| Aon PLC |
ENTREPARTICULIERS and Aon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENTREPARTICULIERS and Aon PLC
The main advantage of trading using opposite ENTREPARTICULIERS and Aon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTREPARTICULIERS position performs unexpectedly, Aon PLC 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 Aon PLC will offset losses from the drop in Aon PLC's long position.| ENTREPARTICULIERS vs. Summit Materials | ENTREPARTICULIERS vs. Rayonier Advanced Materials | ENTREPARTICULIERS vs. VULCAN MATERIALS | ENTREPARTICULIERS vs. GRUPO CARSO A1 |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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