Correlation Between Aerofoam Metals and First Republic
Can any of the company-specific risk be diversified away by investing in both Aerofoam Metals and First Republic 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 Aerofoam Metals and First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerofoam Metals and First Republic Bank, you can compare the effects of market volatilities on Aerofoam Metals and First Republic 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 Aerofoam Metals with a short position of First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerofoam Metals and First Republic.
Diversification Opportunities for Aerofoam Metals and First Republic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aerofoam and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aerofoam Metals and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank and Aerofoam Metals 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 Aerofoam Metals are associated (or correlated) with First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Aerofoam Metals i.e., Aerofoam Metals and First Republic go up and down completely randomly.
Pair Corralation between Aerofoam Metals and First Republic
Given the investment horizon of 90 days Aerofoam Metals is expected to generate 1.68 times more return on investment than First Republic. However, Aerofoam Metals is 1.68 times more volatile than First Republic Bank. It trades about 0.06 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.01 per unit of risk. If you would invest 0.00 in Aerofoam Metals on September 2, 2024 and sell it today you would earn a total of 0.01 from holding Aerofoam Metals or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 30.58% |
| Values | Daily Returns |
Aerofoam Metals vs. First Republic Bank
Performance |
| Timeline |
| Aerofoam Metals |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aerofoam Metals and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerofoam Metals and First Republic
The main advantage of trading using opposite Aerofoam Metals and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerofoam Metals position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Aerofoam Metals vs. Morgan Stanley | Aerofoam Metals vs. Verra Mobility Corp | Aerofoam Metals vs. Ihuman Inc | Aerofoam Metals vs. Proficient Auto Logistics, |
| First Republic vs. Ainsworth Game Technology | First Republic vs. National Vision Holdings | First Republic vs. SunOpta | First Republic vs. Weyco 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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