Correlation Between AECOM TECHNOLOGY and SEKISUI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and SEKISUI CHEMICAL, you can compare the effects of market volatilities on AECOM TECHNOLOGY and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and SEKISUI CHEMICAL.
Diversification Opportunities for AECOM TECHNOLOGY and SEKISUI CHEMICAL
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AECOM and SEKISUI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and SEKISUI CHEMICAL go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and SEKISUI CHEMICAL
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 0.92 times more return on investment than SEKISUI CHEMICAL. However, AECOM TECHNOLOGY is 1.09 times less risky than SEKISUI CHEMICAL. It trades about 0.04 of its potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about 0.04 per unit of risk. If you would invest 8,088 in AECOM TECHNOLOGY on October 16, 2024 and sell it today you would earn a total of 2,212 from holding AECOM TECHNOLOGY or generate 27.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. SEKISUI CHEMICAL
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| SEKISUI CHEMICAL |
AECOM TECHNOLOGY and SEKISUI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and SEKISUI CHEMICAL
The main advantage of trading using opposite AECOM TECHNOLOGY and SEKISUI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, SEKISUI CHEMICAL 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 SEKISUI CHEMICAL will offset losses from the drop in SEKISUI CHEMICAL's long position.| AECOM TECHNOLOGY vs. Sun Life Financial | AECOM TECHNOLOGY vs. BOS BETTER ONLINE | AECOM TECHNOLOGY vs. JSC Halyk bank | AECOM TECHNOLOGY vs. Cincinnati Financial Corp |
| SEKISUI CHEMICAL vs. MidCap Financial Investment | SEKISUI CHEMICAL vs. AECOM TECHNOLOGY | SEKISUI CHEMICAL vs. JLF INVESTMENT | SEKISUI CHEMICAL vs. Virtus Investment Partners |
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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