Correlation Between AECOM TECHNOLOGY and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and KAUFMAN ET 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 AECOM TECHNOLOGY and KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and KAUFMAN ET BROAD, you can compare the effects of market volatilities on AECOM TECHNOLOGY and KAUFMAN ET 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 AECOM TECHNOLOGY with a short position of KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and KAUFMAN ET.
Diversification Opportunities for AECOM TECHNOLOGY and KAUFMAN ET
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AECOM and KAUFMAN is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD and AECOM 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 AECOM TECHNOLOGY are associated (or correlated) with KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and KAUFMAN ET go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and KAUFMAN ET
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.12 times less return on investment than KAUFMAN ET. But when comparing it to its historical volatility, AECOM TECHNOLOGY is 1.37 times less risky than KAUFMAN ET. It trades about 0.05 of its potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,360 in KAUFMAN ET BROAD on September 1, 2024 and sell it today you would earn a total of 740.00 from holding KAUFMAN ET BROAD or generate 31.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| KAUFMAN ET BROAD |
AECOM TECHNOLOGY and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and KAUFMAN ET
The main advantage of trading using opposite AECOM TECHNOLOGY and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| AECOM TECHNOLOGY vs. Axcelis Technologies | AECOM TECHNOLOGY vs. National Retail Properties | AECOM TECHNOLOGY vs. THORNEY TECHS LTD | AECOM TECHNOLOGY vs. Canon Marketing Japan |
| KAUFMAN ET vs. SIVERS SEMICONDUCTORS AB | KAUFMAN ET vs. Darden Restaurants | KAUFMAN ET vs. Reliance Steel Aluminum | KAUFMAN ET vs. Q2M Managementberatung AG |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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