Correlation Between Aerodrome and Blender Financial
Can any of the company-specific risk be diversified away by investing in both Aerodrome and Blender Financial 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 Blender Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerodrome Group and Blender Financial Technologies, you can compare the effects of market volatilities on Aerodrome and Blender Financial 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 Blender Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerodrome and Blender Financial.
Diversification Opportunities for Aerodrome and Blender Financial
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aerodrome and Blender is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aerodrome Group and Blender Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blender Financial 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 Blender Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blender Financial has no effect on the direction of Aerodrome i.e., Aerodrome and Blender Financial go up and down completely randomly.
Pair Corralation between Aerodrome and Blender Financial
Assuming the 90 days trading horizon Aerodrome Group is expected to generate 1.27 times more return on investment than Blender Financial. However, Aerodrome is 1.27 times more volatile than Blender Financial Technologies. It trades about 0.26 of its potential returns per unit of risk. Blender Financial Technologies is currently generating about 0.25 per unit of risk. If you would invest 6,500 in Aerodrome Group on October 23, 2024 and sell it today you would earn a total of 1,400 from holding Aerodrome Group or generate 21.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Aerodrome Group vs. Blender Financial Technologies
Performance |
| Timeline |
| Aerodrome Group |
| Blender Financial |
Aerodrome and Blender Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerodrome and Blender Financial
The main advantage of trading using opposite Aerodrome and Blender Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerodrome position performs unexpectedly, Blender Financial 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 Blender Financial will offset losses from the drop in Blender Financial's long position.| Aerodrome vs. B Communications | Aerodrome vs. Mobile Max M | Aerodrome vs. Hiron Trade Investments Industrial | Aerodrome vs. Blender Financial Technologies |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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