Correlation Between American Assets and Aspen Aerogels
Can any of the company-specific risk be diversified away by investing in both American Assets and Aspen Aerogels 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 American Assets and Aspen Aerogels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Assets Trust and Aspen Aerogels, you can compare the effects of market volatilities on American Assets and Aspen Aerogels 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 American Assets with a short position of Aspen Aerogels. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Assets and Aspen Aerogels.
Diversification Opportunities for American Assets and Aspen Aerogels
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Aspen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding American Assets Trust and Aspen Aerogels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Aerogels and American Assets 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 American Assets Trust are associated (or correlated) with Aspen Aerogels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Aerogels has no effect on the direction of American Assets i.e., American Assets and Aspen Aerogels go up and down completely randomly.
Pair Corralation between American Assets and Aspen Aerogels
Considering the 90-day investment horizon American Assets is expected to generate 5.31 times less return on investment than Aspen Aerogels. But when comparing it to its historical volatility, American Assets Trust is 2.89 times less risky than Aspen Aerogels. It trades about 0.02 of its potential returns per unit of risk. Aspen Aerogels is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,092 in Aspen Aerogels on August 27, 2024 and sell it today you would earn a total of 413.00 from holding Aspen Aerogels or generate 37.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Assets Trust vs. Aspen Aerogels
Performance |
| Timeline |
| American Assets Trust |
| Aspen Aerogels |
American Assets and Aspen Aerogels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Assets and Aspen Aerogels
The main advantage of trading using opposite American Assets and Aspen Aerogels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Assets position performs unexpectedly, Aspen Aerogels 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 Aspen Aerogels will offset losses from the drop in Aspen Aerogels' long position.| American Assets vs. Essential Properties Realty | American Assets vs. Armada Hflr Pr | American Assets vs. CTO Realty Growth | American Assets vs. Brightspire Capital |
| Aspen Aerogels vs. Apyx Medical | Aspen Aerogels vs. Century Communities | Aspen Aerogels vs. Ardmore Shpng | Aspen Aerogels vs. American Assets Trust |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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