Correlation Between Aenza SAA and Reliant Holdings
Can any of the company-specific risk be diversified away by investing in both Aenza SAA and Reliant Holdings 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 Aenza SAA and Reliant Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aenza SAA and Reliant Holdings, you can compare the effects of market volatilities on Aenza SAA and Reliant Holdings 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 Aenza SAA with a short position of Reliant Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aenza SAA and Reliant Holdings.
Diversification Opportunities for Aenza SAA and Reliant Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aenza and Reliant is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aenza SAA and Reliant Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliant Holdings and Aenza SAA 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 Aenza SAA are associated (or correlated) with Reliant Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliant Holdings has no effect on the direction of Aenza SAA i.e., Aenza SAA and Reliant Holdings go up and down completely randomly.
Pair Corralation between Aenza SAA and Reliant Holdings
Given the investment horizon of 90 days Aenza SAA is expected to under-perform the Reliant Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Aenza SAA is 5.17 times less risky than Reliant Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The Reliant Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Reliant Holdings on September 3, 2024 and sell it today you would lose (5.00) from holding Reliant Holdings or give up 38.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.85% |
| Values | Daily Returns |
Aenza SAA vs. Reliant Holdings
Performance |
| Timeline |
| Aenza SAA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Reliant Holdings |
Aenza SAA and Reliant Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aenza SAA and Reliant Holdings
The main advantage of trading using opposite Aenza SAA and Reliant Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aenza SAA position performs unexpectedly, Reliant Holdings 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 Reliant Holdings will offset losses from the drop in Reliant Holdings' long position.| Aenza SAA vs. Bowman Consulting Group | Aenza SAA vs. Api Group Corp | Aenza SAA vs. ACS Actividades de | Aenza SAA vs. ACS Actividades De |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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