Correlation Between AECOM TECHNOLOGY and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and TRADEGATE 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 TRADEGATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and TRADEGATE, you can compare the effects of market volatilities on AECOM TECHNOLOGY and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and TRADEGATE.
Diversification Opportunities for AECOM TECHNOLOGY and TRADEGATE
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AECOM and TRADEGATE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and TRADEGATE go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and TRADEGATE
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.66 times more return on investment than TRADEGATE. However, AECOM TECHNOLOGY is 1.66 times more volatile than TRADEGATE. It trades about 0.04 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.04 per unit of risk. If you would invest 8,235 in AECOM TECHNOLOGY on October 30, 2024 and sell it today you would earn a total of 2,065 from holding AECOM TECHNOLOGY or generate 25.08% 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. TRADEGATE
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| TRADEGATE |
AECOM TECHNOLOGY and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and TRADEGATE
The main advantage of trading using opposite AECOM TECHNOLOGY and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc |
| TRADEGATE vs. Gol Intelligent Airlines | TRADEGATE vs. FIREWEED METALS P | TRADEGATE vs. Singapore Airlines Limited | TRADEGATE vs. MCEWEN MINING INC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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