Correlation Between Amaero International and Aumann AG
Can any of the company-specific risk be diversified away by investing in both Amaero International and Aumann AG 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 Amaero International and Aumann AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amaero International and Aumann AG, you can compare the effects of market volatilities on Amaero International and Aumann AG 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 Amaero International with a short position of Aumann AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amaero International and Aumann AG.
Diversification Opportunities for Amaero International and Aumann AG
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amaero and Aumann is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Amaero International and Aumann AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aumann AG and Amaero 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 Amaero International are associated (or correlated) with Aumann AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aumann AG has no effect on the direction of Amaero International i.e., Amaero International and Aumann AG go up and down completely randomly.
Pair Corralation between Amaero International and Aumann AG
Assuming the 90 days horizon Amaero International is expected to generate 1.26 times more return on investment than Aumann AG. However, Amaero International is 1.26 times more volatile than Aumann AG. It trades about 0.46 of its potential returns per unit of risk. Aumann AG is currently generating about 0.23 per unit of risk. If you would invest 19.00 in Amaero International on November 2, 2024 and sell it today you would earn a total of 5.00 from holding Amaero International or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Amaero International vs. Aumann AG
Performance |
| Timeline |
| Amaero International |
| Aumann AG |
Amaero International and Aumann AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amaero International and Aumann AG
The main advantage of trading using opposite Amaero International and Aumann AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amaero International position performs unexpectedly, Aumann AG 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 Aumann AG will offset losses from the drop in Aumann AG's long position.| Amaero International vs. Atlas Copco AB | Amaero International vs. Arista Power | Amaero International vs. Alfa Laval AB | Amaero International vs. American Commerce Solutions |
| Aumann AG vs. Alfa Laval AB | Aumann AG vs. Arista Power | Aumann AG vs. Atlas Copco AB | Aumann AG vs. American Commerce Solutions |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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