Correlation Between Collins Foods and Aspen Group
Can any of the company-specific risk be diversified away by investing in both Collins Foods and Aspen Group 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 Collins Foods and Aspen Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods and Aspen Group Unit, you can compare the effects of market volatilities on Collins Foods and Aspen Group 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 Collins Foods with a short position of Aspen Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Aspen Group.
Diversification Opportunities for Collins Foods and Aspen Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Collins and Aspen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods and Aspen Group Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Group Unit and Collins Foods 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 Collins Foods are associated (or correlated) with Aspen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Group Unit has no effect on the direction of Collins Foods i.e., Collins Foods and Aspen Group go up and down completely randomly.
Pair Corralation between Collins Foods and Aspen Group
Assuming the 90 days trading horizon Collins Foods is expected to under-perform the Aspen Group. But the stock apears to be less risky and, when comparing its historical volatility, Collins Foods is 1.71 times less risky than Aspen Group. The stock trades about -0.06 of its potential returns per unit of risk. The Aspen Group Unit is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Aspen Group Unit on October 20, 2024 and sell it today you would lose (3.00) from holding Aspen Group Unit or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods vs. Aspen Group Unit
Performance |
| Timeline |
| Collins Foods |
| Aspen Group Unit |
Collins Foods and Aspen Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Aspen Group
The main advantage of trading using opposite Collins Foods and Aspen Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, Aspen Group 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 Aspen Group will offset losses from the drop in Aspen Group's long position.| Collins Foods vs. Centaurus Metals | Collins Foods vs. Truscott Mining Corp | Collins Foods vs. ACDC Metals | Collins Foods vs. Centrex Metals |
| Aspen Group vs. Scentre Group | Aspen Group vs. Vicinity Centres Re | Aspen Group vs. Charter Hall Retail | Aspen Group vs. Cromwell Property Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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