Correlation Between Transport International and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both Transport International and ASPEN TECHINC 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 Transport International and ASPEN TECHINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and ASPEN TECHINC DL, you can compare the effects of market volatilities on Transport International and ASPEN TECHINC 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 Transport International with a short position of ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and ASPEN TECHINC.
Diversification Opportunities for Transport International and ASPEN TECHINC
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Transport and ASPEN is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL and Transport International 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 Transport International Holdings are associated (or correlated) with ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of Transport International i.e., Transport International and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between Transport International and ASPEN TECHINC
Assuming the 90 days horizon Transport International is expected to generate 5.77 times less return on investment than ASPEN TECHINC. In addition to that, Transport International is 3.26 times more volatile than ASPEN TECHINC DL. It trades about 0.01 of its total potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.27 per unit of volatility. If you would invest 24,000 in ASPEN TECHINC DL on November 7, 2024 and sell it today you would earn a total of 1,400 from holding ASPEN TECHINC DL or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Transport International Holdin vs. ASPEN TECHINC DL
Performance |
| Timeline |
| Transport International |
| ASPEN TECHINC DL |
Transport International and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and ASPEN TECHINC
The main advantage of trading using opposite Transport International and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.| Transport International vs. CSX Corporation | Transport International vs. Norfolk Southern | Transport International vs. MTR Limited | Transport International vs. CRRC Limited |
| ASPEN TECHINC vs. AOYAMA TRADING | ASPEN TECHINC vs. PennantPark Investment | ASPEN TECHINC vs. SLR Investment Corp | ASPEN TECHINC vs. Keck Seng Investments |
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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