Correlation Between HE Equipment and Aarons
Can any of the company-specific risk be diversified away by investing in both HE Equipment and Aarons 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 HE Equipment and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and The Aarons, you can compare the effects of market volatilities on HE Equipment and Aarons 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 HE Equipment with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Aarons.
Diversification Opportunities for HE Equipment and Aarons
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HEES and Aarons is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and HE Equipment 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 HE Equipment Services are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of HE Equipment i.e., HE Equipment and Aarons go up and down completely randomly.
Pair Corralation between HE Equipment and Aarons
If you would invest 5,468 in HE Equipment Services on August 24, 2024 and sell it today you would earn a total of 200.00 from holding HE Equipment Services or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
HE Equipment Services vs. The Aarons
Performance |
| Timeline |
| HE Equipment Services |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
HE Equipment and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Aarons
The main advantage of trading using opposite HE Equipment and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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