Correlation Between Aramark Holdings and Lichen China
Can any of the company-specific risk be diversified away by investing in both Aramark Holdings and Lichen China 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 Aramark Holdings and Lichen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aramark Holdings and Lichen China Limited, you can compare the effects of market volatilities on Aramark Holdings and Lichen China 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 Aramark Holdings with a short position of Lichen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aramark Holdings and Lichen China.
Diversification Opportunities for Aramark Holdings and Lichen China
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aramark and Lichen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aramark Holdings and Lichen China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lichen China Limited and Aramark Holdings 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 Aramark Holdings are associated (or correlated) with Lichen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lichen China Limited has no effect on the direction of Aramark Holdings i.e., Aramark Holdings and Lichen China go up and down completely randomly.
Pair Corralation between Aramark Holdings and Lichen China
Given the investment horizon of 90 days Aramark Holdings is expected to generate 0.27 times more return on investment than Lichen China. However, Aramark Holdings is 3.73 times less risky than Lichen China. It trades about 0.25 of its potential returns per unit of risk. Lichen China Limited is currently generating about 0.02 per unit of risk. If you would invest 3,821 in Aramark Holdings on August 27, 2024 and sell it today you would earn a total of 365.00 from holding Aramark Holdings or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aramark Holdings vs. Lichen China Limited
Performance |
| Timeline |
| Aramark Holdings |
| Lichen China Limited |
Aramark Holdings and Lichen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aramark Holdings and Lichen China
The main advantage of trading using opposite Aramark Holdings and Lichen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aramark Holdings position performs unexpectedly, Lichen China 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 Lichen China will offset losses from the drop in Lichen China's long position.| Aramark Holdings vs. Civeo Corp | Aramark Holdings vs. ABM Industries Incorporated | Aramark Holdings vs. ADM Endeavors | Aramark Holdings vs. Maximus |
| Lichen China vs. Genpact Limited | Lichen China vs. Broadridge Financial Solutions | Lichen China vs. First Advantage Corp | Lichen China vs. Franklin Covey |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stocks Directory Find actively traded stocks across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |