Correlation Between Affiliated Resources and Passur Aerospace
Can any of the company-specific risk be diversified away by investing in both Affiliated Resources and Passur Aerospace 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 Affiliated Resources and Passur Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Resources Corp and Passur Aerospace, you can compare the effects of market volatilities on Affiliated Resources and Passur Aerospace 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 Affiliated Resources with a short position of Passur Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and Passur Aerospace.
Diversification Opportunities for Affiliated Resources and Passur Aerospace
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Affiliated and Passur is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and Passur Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passur Aerospace and Affiliated Resources 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 Affiliated Resources Corp are associated (or correlated) with Passur Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passur Aerospace has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Passur Aerospace go up and down completely randomly.
Pair Corralation between Affiliated Resources and Passur Aerospace
Given the investment horizon of 90 days Affiliated Resources Corp is expected to generate 1.62 times more return on investment than Passur Aerospace. However, Affiliated Resources is 1.62 times more volatile than Passur Aerospace. It trades about -0.08 of its potential returns per unit of risk. Passur Aerospace is currently generating about -0.21 per unit of risk. If you would invest 9.00 in Affiliated Resources Corp on August 29, 2024 and sell it today you would lose (0.80) from holding Affiliated Resources Corp or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Resources Corp vs. Passur Aerospace
Performance |
| Timeline |
| Affiliated Resources Corp |
| Passur Aerospace |
Affiliated Resources and Passur Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Resources and Passur Aerospace
The main advantage of trading using opposite Affiliated Resources and Passur Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Resources position performs unexpectedly, Passur Aerospace 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 Passur Aerospace will offset losses from the drop in Passur Aerospace's long position.| Affiliated Resources vs. Allison Transmission Holdings | Affiliated Resources vs. Luminar Technologies | Affiliated Resources vs. Lear Corporation | Affiliated Resources vs. BorgWarner |
| Passur Aerospace vs. SIFCO Industries | Passur Aerospace vs. A2Z Smart Technologies | Passur Aerospace vs. VirTra Inc | Passur Aerospace vs. Coda Octopus Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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