Correlation Between Reliant Holdings and Aecon
Can any of the company-specific risk be diversified away by investing in both Reliant Holdings and Aecon 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 Reliant Holdings and Aecon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reliant Holdings and Aecon Group, you can compare the effects of market volatilities on Reliant Holdings and Aecon 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 Reliant Holdings with a short position of Aecon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliant Holdings and Aecon.
Diversification Opportunities for Reliant Holdings and Aecon
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Reliant and Aecon is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Reliant Holdings and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group and Reliant Holdings 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 Reliant Holdings are associated (or correlated) with Aecon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecon Group has no effect on the direction of Reliant Holdings i.e., Reliant Holdings and Aecon go up and down completely randomly.
Pair Corralation between Reliant Holdings and Aecon
Given the investment horizon of 90 days Reliant Holdings is expected to generate 2.07 times less return on investment than Aecon. In addition to that, Reliant Holdings is 7.49 times more volatile than Aecon Group. It trades about 0.02 of its total potential returns per unit of risk. Aecon Group is currently generating about 0.31 per unit of volatility. If you would invest 1,629 in Aecon Group on August 27, 2024 and sell it today you would earn a total of 444.00 from holding Aecon Group or generate 27.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliant Holdings vs. Aecon Group
Performance |
| Timeline |
| Reliant Holdings |
| Aecon Group |
Reliant Holdings and Aecon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliant Holdings and Aecon
The main advantage of trading using opposite Reliant Holdings and Aecon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliant Holdings position performs unexpectedly, Aecon 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 Aecon will offset losses from the drop in Aecon's long position.| Reliant Holdings vs. Aecon Group | Reliant Holdings vs. Argan Inc | Reliant Holdings vs. Agrify Corp | Reliant Holdings vs. Cardno Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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