Correlation Between Aspen Pharmacare and Allied Electronics
Can any of the company-specific risk be diversified away by investing in both Aspen Pharmacare and Allied Electronics 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 Aspen Pharmacare and Allied Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Pharmacare Holdings and Allied Electronics, you can compare the effects of market volatilities on Aspen Pharmacare and Allied Electronics 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 Aspen Pharmacare with a short position of Allied Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Pharmacare and Allied Electronics.
Diversification Opportunities for Aspen Pharmacare and Allied Electronics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aspen and Allied is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Pharmacare Holdings and Allied Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Electronics and Aspen Pharmacare 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 Aspen Pharmacare Holdings are associated (or correlated) with Allied Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Electronics has no effect on the direction of Aspen Pharmacare i.e., Aspen Pharmacare and Allied Electronics go up and down completely randomly.
Pair Corralation between Aspen Pharmacare and Allied Electronics
Assuming the 90 days trading horizon Aspen Pharmacare Holdings is expected to under-perform the Allied Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Aspen Pharmacare Holdings is 2.33 times less risky than Allied Electronics. The stock trades about -0.44 of its potential returns per unit of risk. The Allied Electronics is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 183,700 in Allied Electronics on September 1, 2024 and sell it today you would earn a total of 18,300 from holding Allied Electronics or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aspen Pharmacare Holdings vs. Allied Electronics
Performance |
| Timeline |
| Aspen Pharmacare Holdings |
| Allied Electronics |
Aspen Pharmacare and Allied Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Pharmacare and Allied Electronics
The main advantage of trading using opposite Aspen Pharmacare and Allied Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Pharmacare position performs unexpectedly, Allied Electronics 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 Allied Electronics will offset losses from the drop in Allied Electronics' long position.| Aspen Pharmacare vs. Blue Label Telecoms | Aspen Pharmacare vs. Bytes Technology | Aspen Pharmacare vs. Astoria Investments | Aspen Pharmacare vs. Frontier Transport Holdings |
| Allied Electronics vs. Centaur Bci Balanced | Allied Electronics vs. Sabvest Capital | Allied Electronics vs. AfricaRhodium ETF | Allied Electronics vs. Indexco Limited |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges |