Correlation Between Aspen Aerogels and American Assets
Can any of the company-specific risk be diversified away by investing in both Aspen Aerogels and American Assets 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 Aerogels and American Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Aerogels and American Assets Trust, you can compare the effects of market volatilities on Aspen Aerogels and American Assets 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 Aerogels with a short position of American Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Aerogels and American Assets.
Diversification Opportunities for Aspen Aerogels and American Assets
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aspen and American is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Aerogels and American Assets Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Assets Trust and Aspen Aerogels 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 Aerogels are associated (or correlated) with American Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Assets Trust has no effect on the direction of Aspen Aerogels i.e., Aspen Aerogels and American Assets go up and down completely randomly.
Pair Corralation between Aspen Aerogels and American Assets
Given the investment horizon of 90 days Aspen Aerogels is expected to under-perform the American Assets. In addition to that, Aspen Aerogels is 2.65 times more volatile than American Assets Trust. It trades about -0.27 of its total potential returns per unit of risk. American Assets Trust is currently generating about 0.1 per unit of volatility. If you would invest 2,779 in American Assets Trust on August 31, 2024 and sell it today you would earn a total of 82.00 from holding American Assets Trust or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Aerogels vs. American Assets Trust
Performance |
| Timeline |
| Aspen Aerogels |
| American Assets Trust |
Aspen Aerogels and American Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Aerogels and American Assets
The main advantage of trading using opposite Aspen Aerogels and American Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Aerogels position performs unexpectedly, American Assets 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 American Assets will offset losses from the drop in American Assets' long position.| Aspen Aerogels vs. Apyx Medical | Aspen Aerogels vs. Century Communities | Aspen Aerogels vs. Ardmore Shpng | Aspen Aerogels vs. American Assets Trust |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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