Correlation Between Aeris Environmental and ImExHS
Can any of the company-specific risk be diversified away by investing in both Aeris Environmental and ImExHS 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 ImExHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeris Environmental and ImExHS, you can compare the effects of market volatilities on Aeris Environmental and ImExHS 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 ImExHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Environmental and ImExHS.
Diversification Opportunities for Aeris Environmental and ImExHS
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeris and ImExHS is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Environmental and ImExHS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImExHS 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 ImExHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImExHS has no effect on the direction of Aeris Environmental i.e., Aeris Environmental and ImExHS go up and down completely randomly.
Pair Corralation between Aeris Environmental and ImExHS
Assuming the 90 days trading horizon Aeris Environmental is expected to generate 1.22 times more return on investment than ImExHS. However, Aeris Environmental is 1.22 times more volatile than ImExHS. It trades about 0.1 of its potential returns per unit of risk. ImExHS is currently generating about -0.02 per unit of risk. If you would invest 2.60 in Aeris Environmental on August 31, 2024 and sell it today you would earn a total of 6.40 from holding Aeris Environmental or generate 246.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.78% |
| Values | Daily Returns |
Aeris Environmental vs. ImExHS
Performance |
| Timeline |
| Aeris Environmental |
| ImExHS |
Aeris Environmental and ImExHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeris Environmental and ImExHS
The main advantage of trading using opposite Aeris Environmental and ImExHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Environmental position performs unexpectedly, ImExHS 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 ImExHS will offset losses from the drop in ImExHS's long position.| Aeris Environmental vs. Champion Iron | Aeris Environmental vs. Tombador Iron | Aeris Environmental vs. The Environmental Group | Aeris Environmental vs. Hawsons Iron |
| ImExHS vs. Andean Silver Limited | ImExHS vs. Hotel Property Investments | ImExHS vs. Super Retail Group | ImExHS vs. Black Rock Mining |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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