Correlation Between Aecom Technology and Stantec
Can any of the company-specific risk be diversified away by investing in both Aecom Technology and Stantec 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 Aecom Technology and Stantec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecom Technology and Stantec, you can compare the effects of market volatilities on Aecom Technology and Stantec 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 Aecom Technology with a short position of Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecom Technology and Stantec.
Diversification Opportunities for Aecom Technology and Stantec
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aecom and Stantec is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aecom Technology and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec and Aecom Technology 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 Aecom Technology are associated (or correlated) with Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of Aecom Technology i.e., Aecom Technology and Stantec go up and down completely randomly.
Pair Corralation between Aecom Technology and Stantec
Considering the 90-day investment horizon Aecom Technology is expected to generate 1.19 times more return on investment than Stantec. However, Aecom Technology is 1.19 times more volatile than Stantec. It trades about 0.04 of its potential returns per unit of risk. Stantec is currently generating about -0.07 per unit of risk. If you would invest 10,612 in Aecom Technology on October 22, 2024 and sell it today you would earn a total of 281.00 from holding Aecom Technology or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aecom Technology vs. Stantec
Performance |
| Timeline |
| Aecom Technology |
| Stantec |
Aecom Technology and Stantec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aecom Technology and Stantec
The main advantage of trading using opposite Aecom Technology and Stantec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecom Technology position performs unexpectedly, Stantec 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 Stantec will offset losses from the drop in Stantec's long position.| Aecom Technology vs. Quanta Services | Aecom Technology vs. KBR Inc | Aecom Technology vs. Fluor | Aecom Technology vs. Tetra Tech |
| Stantec vs. EMCOR Group | Stantec vs. Comfort Systems USA | Stantec vs. Primoris Services | Stantec vs. Granite Construction Incorporated |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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