Correlation Between National Instruments and Aspen Technology
Can any of the company-specific risk be diversified away by investing in both National Instruments and Aspen 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 National Instruments and Aspen Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Instruments and Aspen Technology, you can compare the effects of market volatilities on National Instruments and Aspen 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 National Instruments with a short position of Aspen Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Instruments and Aspen Technology.
Diversification Opportunities for National Instruments and Aspen Technology
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Aspen is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding National Instruments and Aspen Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Technology and National Instruments 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 National Instruments are associated (or correlated) with Aspen Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Technology has no effect on the direction of National Instruments i.e., National Instruments and Aspen Technology go up and down completely randomly.
Pair Corralation between National Instruments and Aspen Technology
If you would invest 21,054 in Aspen Technology on September 3, 2024 and sell it today you would earn a total of 3,780 from holding Aspen Technology or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
National Instruments vs. Aspen Technology
Performance |
| Timeline |
| National Instruments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aspen Technology |
National Instruments and Aspen Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Instruments and Aspen Technology
The main advantage of trading using opposite National Instruments and Aspen Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Instruments position performs unexpectedly, Aspen 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 Aspen Technology will offset losses from the drop in Aspen Technology's long position.| National Instruments vs. Aspen Technology | National Instruments vs. Bentley Systems | National Instruments vs. Tyler Technologies | National Instruments vs. Blackbaud |
| Aspen Technology vs. Bentley Systems | Aspen Technology vs. Tyler Technologies | Aspen Technology vs. Blackbaud | Aspen Technology vs. SSC Technologies Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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