Correlation Between AECOM and THORNEY TECHS
Can any of the company-specific risk be diversified away by investing in both AECOM and THORNEY TECHS 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 and THORNEY TECHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM and THORNEY TECHS LTD, you can compare the effects of market volatilities on AECOM and THORNEY TECHS 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 with a short position of THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM and THORNEY TECHS.
Diversification Opportunities for AECOM and THORNEY TECHS
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between AECOM and THORNEY is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AECOM and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD and AECOM 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 are associated (or correlated) with THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of AECOM i.e., AECOM and THORNEY TECHS go up and down completely randomly.
Pair Corralation between AECOM and THORNEY TECHS
Assuming the 90 days horizon AECOM is expected to generate 0.34 times more return on investment than THORNEY TECHS. However, AECOM is 2.93 times less risky than THORNEY TECHS. It trades about 0.13 of its potential returns per unit of risk. THORNEY TECHS LTD is currently generating about 0.03 per unit of risk. If you would invest 7,812 in AECOM on November 3, 2024 and sell it today you would earn a total of 2,288 from holding AECOM or generate 29.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM vs. THORNEY TECHS LTD
Performance |
| Timeline |
| AECOM |
| THORNEY TECHS LTD |
AECOM and THORNEY TECHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM and THORNEY TECHS
The main advantage of trading using opposite AECOM and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS's long position.| AECOM vs. Sunny Optical Technology | AECOM vs. ecotel communication ag | AECOM vs. Hemisphere Energy Corp | AECOM vs. Allegheny Technologies Incorporated |
| THORNEY TECHS vs. STEEL DYNAMICS | THORNEY TECHS vs. HEMISPHERE EGY | THORNEY TECHS vs. Olympic Steel | THORNEY TECHS vs. GMO Internet |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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