Correlation Between Aerodrome and Silver Castle
Can any of the company-specific risk be diversified away by investing in both Aerodrome and Silver Castle 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 Aerodrome and Silver Castle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerodrome Group and Silver Castle Holdings, you can compare the effects of market volatilities on Aerodrome and Silver Castle 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 Aerodrome with a short position of Silver Castle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerodrome and Silver Castle.
Diversification Opportunities for Aerodrome and Silver Castle
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aerodrome and Silver is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aerodrome Group and Silver Castle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Castle Holdings and Aerodrome 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 Aerodrome Group are associated (or correlated) with Silver Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Castle Holdings has no effect on the direction of Aerodrome i.e., Aerodrome and Silver Castle go up and down completely randomly.
Pair Corralation between Aerodrome and Silver Castle
Assuming the 90 days trading horizon Aerodrome Group is expected to under-perform the Silver Castle. In addition to that, Aerodrome is 1.03 times more volatile than Silver Castle Holdings. It trades about -0.24 of its total potential returns per unit of risk. Silver Castle Holdings is currently generating about -0.1 per unit of volatility. If you would invest 62,200 in Silver Castle Holdings on September 13, 2024 and sell it today you would lose (5,380) from holding Silver Castle Holdings or give up 8.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerodrome Group vs. Silver Castle Holdings
Performance |
| Timeline |
| Aerodrome Group |
| Silver Castle Holdings |
Aerodrome and Silver Castle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerodrome and Silver Castle
The main advantage of trading using opposite Aerodrome and Silver Castle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerodrome position performs unexpectedly, Silver Castle 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 Silver Castle will offset losses from the drop in Silver Castle's long position.| Aerodrome vs. Amot Investments | Aerodrome vs. Discount Investment Corp | Aerodrome vs. GODM Investments | Aerodrome vs. Azorim Investment Development |
| Silver Castle vs. Analyst IMS Investment | Silver Castle vs. Imed Infinity Medical Limited | Silver Castle vs. Ram On Investments and | Silver Castle vs. Skyline Investments |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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