Correlation Between ARISTOCRAT LEISURE and SQUIRREL MEDIA
Can any of the company-specific risk be diversified away by investing in both ARISTOCRAT LEISURE and SQUIRREL MEDIA 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 ARISTOCRAT LEISURE and SQUIRREL MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARISTOCRAT LEISURE and SQUIRREL MEDIA SA, you can compare the effects of market volatilities on ARISTOCRAT LEISURE and SQUIRREL MEDIA 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 ARISTOCRAT LEISURE with a short position of SQUIRREL MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and SQUIRREL MEDIA.
Diversification Opportunities for ARISTOCRAT LEISURE and SQUIRREL MEDIA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARISTOCRAT and SQUIRREL is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE and SQUIRREL MEDIA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQUIRREL MEDIA SA and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE are associated (or correlated) with SQUIRREL MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQUIRREL MEDIA SA has no effect on the direction of ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and SQUIRREL MEDIA go up and down completely randomly.
Pair Corralation between ARISTOCRAT LEISURE and SQUIRREL MEDIA
Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 3.51 times less return on investment than SQUIRREL MEDIA. But when comparing it to its historical volatility, ARISTOCRAT LEISURE is 2.69 times less risky than SQUIRREL MEDIA. It trades about 0.25 of its potential returns per unit of risk. SQUIRREL MEDIA SA is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 122.00 in SQUIRREL MEDIA SA on October 14, 2024 and sell it today you would earn a total of 17.00 from holding SQUIRREL MEDIA SA or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARISTOCRAT LEISURE vs. SQUIRREL MEDIA SA
Performance |
| Timeline |
| ARISTOCRAT LEISURE |
| SQUIRREL MEDIA SA |
ARISTOCRAT LEISURE and SQUIRREL MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARISTOCRAT LEISURE and SQUIRREL MEDIA
The main advantage of trading using opposite ARISTOCRAT LEISURE and SQUIRREL MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE position performs unexpectedly, SQUIRREL MEDIA 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 SQUIRREL MEDIA will offset losses from the drop in SQUIRREL MEDIA's long position.| ARISTOCRAT LEISURE vs. TIANDE CHEMICAL | ARISTOCRAT LEISURE vs. Sinopec Shanghai Petrochemical | ARISTOCRAT LEISURE vs. Commonwealth Bank of | ARISTOCRAT LEISURE vs. Soken Chemical Engineering |
| SQUIRREL MEDIA vs. Sterling Construction | SQUIRREL MEDIA vs. ARISTOCRAT LEISURE | SQUIRREL MEDIA vs. Federal Agricultural Mortgage | SQUIRREL MEDIA vs. Granite Construction |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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