Correlation Between Aerius International and Sack Lunch
Can any of the company-specific risk be diversified away by investing in both Aerius International and Sack Lunch 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 Sack Lunch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerius International and Sack Lunch Productions, you can compare the effects of market volatilities on Aerius International and Sack Lunch 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 Sack Lunch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerius International and Sack Lunch.
Diversification Opportunities for Aerius International and Sack Lunch
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aerius and Sack is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aerius International and Sack Lunch Productions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sack Lunch Productions 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 Sack Lunch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sack Lunch Productions has no effect on the direction of Aerius International i.e., Aerius International and Sack Lunch go up and down completely randomly.
Pair Corralation between Aerius International and Sack Lunch
Given the investment horizon of 90 days Aerius International is expected to generate 17.99 times less return on investment than Sack Lunch. But when comparing it to its historical volatility, Aerius International is 6.22 times less risky than Sack Lunch. It trades about 0.07 of its potential returns per unit of risk. Sack Lunch Productions is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1.10 in Sack Lunch Productions on November 3, 2024 and sell it today you would earn a total of 0.94 from holding Sack Lunch Productions or generate 85.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Aerius International vs. Sack Lunch Productions
Performance |
| Timeline |
| Aerius International |
| Sack Lunch Productions |
Aerius International and Sack Lunch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerius International and Sack Lunch
The main advantage of trading using opposite Aerius International and Sack Lunch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerius International position performs unexpectedly, Sack Lunch 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 Sack Lunch will offset losses from the drop in Sack Lunch's long position.| Aerius International vs. Sack Lunch Productions | Aerius International vs. Potash America | Aerius International vs. Blue Diamond Ventures | Aerius International vs. Daniels Corporate Advisory |
| Sack Lunch vs. Aerius International | Sack Lunch vs. Potash America | Sack Lunch vs. Blue Diamond Ventures | Sack Lunch vs. Daniels Corporate Advisory |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |