Correlation Between Aeris Environmental and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Aeris Environmental and Hansen Technologies 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 Aeris Environmental and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeris Environmental and Hansen Technologies, you can compare the effects of market volatilities on Aeris Environmental and Hansen Technologies 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 Aeris Environmental with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Environmental and Hansen Technologies.
Diversification Opportunities for Aeris Environmental and Hansen Technologies
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aeris and Hansen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Environmental and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Aeris Environmental 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 Aeris Environmental are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Aeris Environmental i.e., Aeris Environmental and Hansen Technologies go up and down completely randomly.
Pair Corralation between Aeris Environmental and Hansen Technologies
Assuming the 90 days trading horizon Aeris Environmental is expected to generate 2.2 times more return on investment than Hansen Technologies. However, Aeris Environmental is 2.2 times more volatile than Hansen Technologies. It trades about 0.07 of its potential returns per unit of risk. Hansen Technologies is currently generating about 0.04 per unit of risk. If you would invest 4.10 in Aeris Environmental on November 9, 2024 and sell it today you would earn a total of 2.60 from holding Aeris Environmental or generate 63.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeris Environmental vs. Hansen Technologies
Performance |
| Timeline |
| Aeris Environmental |
| Hansen Technologies |
Aeris Environmental and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeris Environmental and Hansen Technologies
The main advantage of trading using opposite Aeris Environmental and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Environmental position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.| Aeris Environmental vs. Galena Mining | Aeris Environmental vs. Djerriwarrh Investments | Aeris Environmental vs. Mirrabooka Investments | Aeris Environmental vs. Microequities Asset Management |
| Hansen Technologies vs. Saferoads Holdings | Hansen Technologies vs. Aussie Broadband | Hansen Technologies vs. Sky Metals | Hansen Technologies vs. Queste Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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