Correlation Between Aspen Technology and Aston Martin
Can any of the company-specific risk be diversified away by investing in both Aspen Technology and Aston Martin 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 Technology and Aston Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Technology and Aston Martin Lagonda, you can compare the effects of market volatilities on Aspen Technology and Aston Martin 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 Technology with a short position of Aston Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Technology and Aston Martin.
Diversification Opportunities for Aspen Technology and Aston Martin
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aspen and Aston is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Technology and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda and Aspen Technology 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 Technology are associated (or correlated) with Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of Aspen Technology i.e., Aspen Technology and Aston Martin go up and down completely randomly.
Pair Corralation between Aspen Technology and Aston Martin
Given the investment horizon of 90 days Aspen Technology is expected to generate 0.38 times more return on investment than Aston Martin. However, Aspen Technology is 2.63 times less risky than Aston Martin. It trades about 0.07 of its potential returns per unit of risk. Aston Martin Lagonda is currently generating about -0.02 per unit of risk. If you would invest 19,782 in Aspen Technology on November 9, 2024 and sell it today you would earn a total of 6,773 from holding Aspen Technology or generate 34.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Aspen Technology vs. Aston Martin Lagonda
Performance |
| Timeline |
| Aspen Technology |
| Aston Martin Lagonda |
Aspen Technology and Aston Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Technology and Aston Martin
The main advantage of trading using opposite Aspen Technology and Aston Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Technology position performs unexpectedly, Aston Martin 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 Aston Martin will offset losses from the drop in Aston Martin's long position.| Aspen Technology vs. Bentley Systems | Aspen Technology vs. Tyler Technologies | Aspen Technology vs. Blackbaud | Aspen Technology vs. SSC Technologies Holdings |
| Aston Martin vs. Polestar Automotive Holding | Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Mercedes Benz Group AG | Aston Martin vs. Porsche Automobile Holding |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |