Correlation Between Exponent and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both Exponent and Aeries Technology 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 Exponent and Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and Aeries Technology, you can compare the effects of market volatilities on Exponent and Aeries Technology 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 Exponent with a short position of Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Aeries Technology.
Diversification Opportunities for Exponent and Aeries Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exponent and Aeries is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and Exponent 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 Exponent are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of Exponent i.e., Exponent and Aeries Technology go up and down completely randomly.
Pair Corralation between Exponent and Aeries Technology
Given the investment horizon of 90 days Exponent is expected to generate 0.4 times more return on investment than Aeries Technology. However, Exponent is 2.52 times less risky than Aeries Technology. It trades about 0.01 of its potential returns per unit of risk. Aeries Technology is currently generating about -0.06 per unit of risk. If you would invest 10,177 in Exponent on August 26, 2024 and sell it today you would lose (373.00) from holding Exponent or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exponent vs. Aeries Technology
Performance |
| Timeline |
| Exponent |
| Aeries Technology |
Exponent and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exponent and Aeries Technology
The main advantage of trading using opposite Exponent and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.| Exponent vs. Equifax | Exponent vs. Franklin Covey | Exponent vs. TransUnion | Exponent vs. Forrester Research |
| Aeries Technology vs. Equifax | Aeries Technology vs. Franklin Covey | Aeries Technology vs. TransUnion | Aeries Technology vs. Forrester Research |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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