Correlation Between Aerius International and Booz Allen
Can any of the company-specific risk be diversified away by investing in both Aerius International and Booz Allen 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 Aerius International and Booz Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerius International and Booz Allen Hamilton, you can compare the effects of market volatilities on Aerius International and Booz Allen 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 Aerius International with a short position of Booz Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerius International and Booz Allen.
Diversification Opportunities for Aerius International and Booz Allen
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aerius and Booz is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aerius International and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton and Aerius International 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 Aerius International are associated (or correlated) with Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of Aerius International i.e., Aerius International and Booz Allen go up and down completely randomly.
Pair Corralation between Aerius International and Booz Allen
Given the investment horizon of 90 days Aerius International is expected to generate 0.4 times more return on investment than Booz Allen. However, Aerius International is 2.51 times less risky than Booz Allen. It trades about 0.21 of its potential returns per unit of risk. Booz Allen Hamilton is currently generating about -0.28 per unit of risk. If you would invest 0.16 in Aerius International on August 29, 2024 and sell it today you would earn a total of 0.01 from holding Aerius International or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerius International vs. Booz Allen Hamilton
Performance |
| Timeline |
| Aerius International |
| Booz Allen Hamilton |
Aerius International and Booz Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerius International and Booz Allen
The main advantage of trading using opposite Aerius International and Booz Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerius International position performs unexpectedly, Booz Allen 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 Booz Allen will offset losses from the drop in Booz Allen's long position.| Aerius International vs. Sack Lunch Productions | Aerius International vs. Potash America | Aerius International vs. Dalrada Financial Corp | Aerius International vs. TransUnion |
| Booz Allen vs. NFT Limited | Booz Allen vs. Enlivex Therapeutics | Booz Allen vs. Wisekey International Holding | Booz Allen vs. Sphere 3D Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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