Correlation Between CAIRN HOMES and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both CAIRN HOMES and Aedas Homes 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 CAIRN HOMES and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIRN HOMES EO and Aedas Homes SA, you can compare the effects of market volatilities on CAIRN HOMES and Aedas Homes 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 CAIRN HOMES with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIRN HOMES and Aedas Homes.
Diversification Opportunities for CAIRN HOMES and Aedas Homes
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CAIRN and Aedas is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CAIRN HOMES EO and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and CAIRN HOMES 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 CAIRN HOMES EO are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of CAIRN HOMES i.e., CAIRN HOMES and Aedas Homes go up and down completely randomly.
Pair Corralation between CAIRN HOMES and Aedas Homes
Assuming the 90 days horizon CAIRN HOMES EO is expected to under-perform the Aedas Homes. In addition to that, CAIRN HOMES is 1.07 times more volatile than Aedas Homes SA. It trades about -0.07 of its total potential returns per unit of risk. Aedas Homes SA is currently generating about 0.3 per unit of volatility. If you would invest 2,580 in Aedas Homes SA on November 6, 2024 and sell it today you would earn a total of 345.00 from holding Aedas Homes SA or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIRN HOMES EO vs. Aedas Homes SA
Performance |
| Timeline |
| CAIRN HOMES EO |
| Aedas Homes SA |
CAIRN HOMES and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIRN HOMES and Aedas Homes
The main advantage of trading using opposite CAIRN HOMES and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIRN HOMES position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| CAIRN HOMES vs. GRIFFIN MINING LTD | CAIRN HOMES vs. CORNISH METALS INC | CAIRN HOMES vs. Transport International Holdings | CAIRN HOMES vs. Texas Roadhouse |
| Aedas Homes vs. Daito Trust Construction | Aedas Homes vs. Titan Machinery | Aedas Homes vs. FIRST SHIP LEASE | Aedas Homes vs. WIMFARM SA EO |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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