Correlation Between Booz Allen and Aerius International
Can any of the company-specific risk be diversified away by investing in both Booz Allen and Aerius 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 Booz Allen and Aerius International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booz Allen Hamilton and Aerius International, you can compare the effects of market volatilities on Booz Allen and Aerius 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 Booz Allen with a short position of Aerius International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booz Allen and Aerius International.
Diversification Opportunities for Booz Allen and Aerius International
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Booz and Aerius is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Booz Allen Hamilton and Aerius International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerius International and Booz Allen 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 Booz Allen Hamilton are associated (or correlated) with Aerius International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerius International has no effect on the direction of Booz Allen i.e., Booz Allen and Aerius International go up and down completely randomly.
Pair Corralation between Booz Allen and Aerius International
Considering the 90-day investment horizon Booz Allen Hamilton is expected to under-perform the Aerius International. In addition to that, Booz Allen is 2.51 times more volatile than Aerius International. It trades about -0.28 of its total potential returns per unit of risk. Aerius International is currently generating about 0.21 per unit of volatility. If you would invest 0.16 in Aerius International on August 29, 2024 and sell it today you would earn a total of 0.01 from holding Aerius International or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Booz Allen Hamilton vs. Aerius International
Performance |
| Timeline |
| Booz Allen Hamilton |
| Aerius International |
Booz Allen and Aerius International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booz Allen and Aerius International
The main advantage of trading using opposite Booz Allen and Aerius International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booz Allen position performs unexpectedly, Aerius 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 Aerius International will offset losses from the drop in Aerius International's long position.| Booz Allen vs. NFT Limited | Booz Allen vs. Enlivex Therapeutics | Booz Allen vs. Wisekey International Holding | Booz Allen vs. Sphere 3D Corp |
| Aerius International vs. Sack Lunch Productions | Aerius International vs. Potash America | Aerius International vs. Dalrada Financial Corp | Aerius International vs. TransUnion |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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