Correlation Between Lowland Investment and AES Corp
Can any of the company-specific risk be diversified away by investing in both Lowland Investment and AES Corp 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 Lowland Investment and AES Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowland Investment Co and AES Corp, you can compare the effects of market volatilities on Lowland Investment and AES Corp 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 Lowland Investment with a short position of AES Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowland Investment and AES Corp.
Diversification Opportunities for Lowland Investment and AES Corp
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lowland and AES is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lowland Investment Co and AES Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES Corp and Lowland Investment 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 Lowland Investment Co are associated (or correlated) with AES Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES Corp has no effect on the direction of Lowland Investment i.e., Lowland Investment and AES Corp go up and down completely randomly.
Pair Corralation between Lowland Investment and AES Corp
Assuming the 90 days trading horizon Lowland Investment Co is expected to generate 0.43 times more return on investment than AES Corp. However, Lowland Investment Co is 2.32 times less risky than AES Corp. It trades about 0.17 of its potential returns per unit of risk. AES Corp is currently generating about 0.04 per unit of risk. If you would invest 12,300 in Lowland Investment Co on September 13, 2024 and sell it today you would earn a total of 450.00 from holding Lowland Investment Co or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowland Investment Co vs. AES Corp
Performance |
| Timeline |
| Lowland Investment |
| AES Corp |
Lowland Investment and AES Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowland Investment and AES Corp
The main advantage of trading using opposite Lowland Investment and AES Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowland Investment position performs unexpectedly, AES Corp 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 AES Corp will offset losses from the drop in AES Corp's long position.| Lowland Investment vs. Catalyst Media Group | Lowland Investment vs. CATLIN GROUP | Lowland Investment vs. Tamburi Investment Partners | Lowland Investment vs. Magnora ASA |
| AES Corp vs. Playtech Plc | AES Corp vs. Wyndham Hotels Resorts | AES Corp vs. Medical Properties Trust | AES Corp vs. Melia Hotels |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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