Correlation Between AECOM TECHNOLOGY and OPEN HOUSE
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and OPEN HOUSE 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 OPEN HOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and OPEN HOUSE GROUP, you can compare the effects of market volatilities on AECOM TECHNOLOGY and OPEN HOUSE 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 OPEN HOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and OPEN HOUSE.
Diversification Opportunities for AECOM TECHNOLOGY and OPEN HOUSE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AECOM and OPEN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and OPEN HOUSE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN HOUSE GROUP 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 OPEN HOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN HOUSE GROUP has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and OPEN HOUSE go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and OPEN HOUSE
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.33 times less return on investment than OPEN HOUSE. But when comparing it to its historical volatility, AECOM TECHNOLOGY is 1.54 times less risky than OPEN HOUSE. It trades about 0.07 of its potential returns per unit of risk. OPEN HOUSE GROUP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,700 in OPEN HOUSE GROUP on September 12, 2024 and sell it today you would earn a total of 900.00 from holding OPEN HOUSE GROUP or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. OPEN HOUSE GROUP
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| OPEN HOUSE GROUP |
AECOM TECHNOLOGY and OPEN HOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and OPEN HOUSE
The main advantage of trading using opposite AECOM TECHNOLOGY and OPEN HOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, OPEN HOUSE 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 OPEN HOUSE will offset losses from the drop in OPEN HOUSE's long position.| AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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