Correlation Between AECOM TECHNOLOGY and Kaufman Broad
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and Kaufman Broad 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 Broad 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 Broad SA, you can compare the effects of market volatilities on AECOM TECHNOLOGY and Kaufman Broad 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 Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and Kaufman Broad.
Diversification Opportunities for AECOM TECHNOLOGY and Kaufman Broad
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AECOM and Kaufman is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad SA 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 Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and Kaufman Broad go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and Kaufman Broad
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.09 times less return on investment than Kaufman Broad. But when comparing it to its historical volatility, AECOM TECHNOLOGY is 1.36 times less risky than Kaufman Broad. It trades about 0.06 of its potential returns per unit of risk. Kaufman Broad SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,217 in Kaufman Broad SA on September 3, 2024 and sell it today you would earn a total of 888.00 from holding Kaufman Broad SA or generate 40.05% 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 Broad SA
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| Kaufman Broad SA |
AECOM TECHNOLOGY and Kaufman Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and Kaufman Broad
The main advantage of trading using opposite AECOM TECHNOLOGY and Kaufman Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, Kaufman Broad 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 Broad will offset losses from the drop in Kaufman Broad's long position.| AECOM TECHNOLOGY vs. ON SEMICONDUCTOR | AECOM TECHNOLOGY vs. CHINA TONTINE WINES | AECOM TECHNOLOGY vs. COSTCO WHOLESALE CDR | AECOM TECHNOLOGY vs. BJs Wholesale Club |
| Kaufman Broad vs. Sekisui Chemical Co | Kaufman Broad vs. BARRATT DEVEL UNSPADR2 | Kaufman Broad vs. Superior Plus Corp | Kaufman Broad vs. NMI Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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