Correlation Between AECOM TECHNOLOGY and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and EBRO FOODS 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 EBRO FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and EBRO FOODS, you can compare the effects of market volatilities on AECOM TECHNOLOGY and EBRO FOODS 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 EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and EBRO FOODS.
Diversification Opportunities for AECOM TECHNOLOGY and EBRO FOODS
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between AECOM and EBRO is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS 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 EBRO FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBRO FOODS has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and EBRO FOODS go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and EBRO FOODS
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 0.94 times more return on investment than EBRO FOODS. However, AECOM TECHNOLOGY is 1.06 times less risky than EBRO FOODS. It trades about 0.05 of its potential returns per unit of risk. EBRO FOODS is currently generating about 0.02 per unit of risk. If you would invest 7,745 in AECOM TECHNOLOGY on October 11, 2024 and sell it today you would earn a total of 2,555 from holding AECOM TECHNOLOGY or generate 32.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. EBRO FOODS
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| EBRO FOODS |
AECOM TECHNOLOGY and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and EBRO FOODS
The main advantage of trading using opposite AECOM TECHNOLOGY and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, EBRO FOODS 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 EBRO FOODS will offset losses from the drop in EBRO FOODS's long position.| AECOM TECHNOLOGY vs. Eurasia Mining Plc | AECOM TECHNOLOGY vs. MCEWEN MINING INC | AECOM TECHNOLOGY vs. Monument Mining Limited | AECOM TECHNOLOGY vs. Grand Canyon Education |
| EBRO FOODS vs. SPORTING | EBRO FOODS vs. AECOM TECHNOLOGY | EBRO FOODS vs. Sunny Optical Technology | EBRO FOODS vs. Micron Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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