Correlation Between AECOM TECHNOLOGY and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and BOSTON BEER 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 BOSTON BEER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and BOSTON BEER A , you can compare the effects of market volatilities on AECOM TECHNOLOGY and BOSTON BEER 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 BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and BOSTON BEER.
Diversification Opportunities for AECOM TECHNOLOGY and BOSTON BEER
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AECOM and BOSTON is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A 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 BOSTON BEER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOSTON BEER A has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and BOSTON BEER go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and BOSTON BEER
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.4 times more return on investment than BOSTON BEER. However, AECOM TECHNOLOGY is 1.4 times more volatile than BOSTON BEER A . It trades about 0.26 of its potential returns per unit of risk. BOSTON BEER A is currently generating about 0.14 per unit of risk. If you would invest 9,700 in AECOM TECHNOLOGY on August 30, 2024 and sell it today you would earn a total of 1,400 from holding AECOM TECHNOLOGY or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. BOSTON BEER A
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| BOSTON BEER A |
AECOM TECHNOLOGY and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and BOSTON BEER
The main advantage of trading using opposite AECOM TECHNOLOGY and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, BOSTON BEER 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 BOSTON BEER will offset losses from the drop in BOSTON BEER's long position.| AECOM TECHNOLOGY vs. BOSTON BEER A | AECOM TECHNOLOGY vs. Columbia Sportswear | AECOM TECHNOLOGY vs. British American Tobacco | AECOM TECHNOLOGY vs. Japan Tobacco |
| BOSTON BEER vs. Apple Inc | BOSTON BEER vs. Apple Inc | BOSTON BEER vs. Superior Plus Corp | BOSTON BEER vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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