Correlation Between Aspen Technology and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Aspen Technology and Wilmar International 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 Wilmar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Technology and Wilmar International Limited, you can compare the effects of market volatilities on Aspen Technology and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Technology and Wilmar International.
Diversification Opportunities for Aspen Technology and Wilmar International
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aspen and Wilmar is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Technology and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Aspen Technology i.e., Aspen Technology and Wilmar International go up and down completely randomly.
Pair Corralation between Aspen Technology and Wilmar International
Given the investment horizon of 90 days Aspen Technology is expected to generate 0.46 times more return on investment than Wilmar International. However, Aspen Technology is 2.18 times less risky than Wilmar International. It trades about 0.08 of its potential returns per unit of risk. Wilmar International Limited is currently generating about 0.03 per unit of risk. If you would invest 18,641 in Aspen Technology on November 5, 2024 and sell it today you would earn a total of 7,779 from holding Aspen Technology or generate 41.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.71% |
| Values | Daily Returns |
Aspen Technology vs. Wilmar International Limited
Performance |
| Timeline |
| Aspen Technology |
| Wilmar International |
Aspen Technology and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Technology and Wilmar International
The main advantage of trading using opposite Aspen Technology and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Technology position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| Aspen Technology vs. Bentley Systems | Aspen Technology vs. Tyler Technologies | Aspen Technology vs. Blackbaud | Aspen Technology vs. SSC Technologies Holdings |
| Wilmar International vs. Fresh Del Monte | Wilmar International vs. Limoneira Co | Wilmar International vs. Brasilagro Adr | Wilmar International vs. Alico Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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