Correlation Between Artemis Strategic and Aarons
Can any of the company-specific risk be diversified away by investing in both Artemis Strategic and Aarons 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 Artemis Strategic and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artemis Strategic Investment and The Aarons, you can compare the effects of market volatilities on Artemis Strategic and Aarons 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 Artemis Strategic with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artemis Strategic and Aarons.
Diversification Opportunities for Artemis Strategic and Aarons
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artemis and Aarons is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Artemis Strategic Investment and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and Artemis Strategic 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 Artemis Strategic Investment are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Artemis Strategic i.e., Artemis Strategic and Aarons go up and down completely randomly.
Pair Corralation between Artemis Strategic and Aarons
Given the investment horizon of 90 days Artemis Strategic is expected to generate 1.24 times less return on investment than Aarons. But when comparing it to its historical volatility, Artemis Strategic Investment is 23.0 times less risky than Aarons. It trades about 0.21 of its potential returns per unit of risk. The Aarons is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,122 in The Aarons on September 3, 2024 and sell it today you would lose (113.00) from holding The Aarons or give up 10.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 33.63% |
| Values | Daily Returns |
Artemis Strategic Investment vs. The Aarons
Performance |
| Timeline |
| Artemis Strategic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Artemis Strategic and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artemis Strategic and Aarons
The main advantage of trading using opposite Artemis Strategic and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artemis Strategic position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.The idea behind Artemis Strategic Investment and The Aarons pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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