Correlation Between AECOM TECHNOLOGY and Ichor Coal
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and Ichor Coal 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 Ichor Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and Ichor Coal NV, you can compare the effects of market volatilities on AECOM TECHNOLOGY and Ichor Coal 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 Ichor Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and Ichor Coal.
Diversification Opportunities for AECOM TECHNOLOGY and Ichor Coal
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AECOM and Ichor is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and Ichor Coal NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Coal NV 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 Ichor Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Coal NV has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and Ichor Coal go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and Ichor Coal
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 0.56 times more return on investment than Ichor Coal. However, AECOM TECHNOLOGY is 1.8 times less risky than Ichor Coal. It trades about 0.07 of its potential returns per unit of risk. Ichor Coal NV is currently generating about -0.14 per unit of risk. If you would invest 7,801 in AECOM TECHNOLOGY on September 12, 2024 and sell it today you would earn a total of 2,799 from holding AECOM TECHNOLOGY or generate 35.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.16% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. Ichor Coal NV
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| Ichor Coal NV |
AECOM TECHNOLOGY and Ichor Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and Ichor Coal
The main advantage of trading using opposite AECOM TECHNOLOGY and Ichor Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, Ichor Coal 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 Ichor Coal will offset losses from the drop in Ichor Coal's long position.| AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc |
| Ichor Coal vs. CHINA SHENHUA ENA | Ichor Coal vs. China Coal Energy | Ichor Coal vs. Yancoal Australia | Ichor Coal vs. Banpu PCL |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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