Correlation Between Sack Lunch and Aerius International
Can any of the company-specific risk be diversified away by investing in both Sack Lunch and Aerius International 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 Sack Lunch and Aerius International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sack Lunch Productions and Aerius International, you can compare the effects of market volatilities on Sack Lunch and Aerius International 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 Sack Lunch with a short position of Aerius International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sack Lunch and Aerius International.
Diversification Opportunities for Sack Lunch and Aerius International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sack and Aerius is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sack Lunch Productions and Aerius International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerius International and Sack Lunch 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 Sack Lunch Productions are associated (or correlated) with Aerius International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerius International has no effect on the direction of Sack Lunch i.e., Sack Lunch and Aerius International go up and down completely randomly.
Pair Corralation between Sack Lunch and Aerius International
Given the investment horizon of 90 days Sack Lunch Productions is expected to generate 6.22 times more return on investment than Aerius International. However, Sack Lunch is 6.22 times more volatile than Aerius International. It trades about 0.2 of its potential returns per unit of risk. Aerius International is currently generating about 0.07 per unit of risk. If you would invest 1.10 in Sack Lunch Productions on November 3, 2024 and sell it today you would earn a total of 0.94 from holding Sack Lunch Productions or generate 85.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Sack Lunch Productions vs. Aerius International
Performance |
| Timeline |
| Sack Lunch Productions |
| Aerius International |
Sack Lunch and Aerius International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sack Lunch and Aerius International
The main advantage of trading using opposite Sack Lunch and Aerius International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sack Lunch position performs unexpectedly, Aerius International 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 Aerius International will offset losses from the drop in Aerius International's long position.| Sack Lunch vs. Aerius International | Sack Lunch vs. Potash America | Sack Lunch vs. Blue Diamond Ventures | Sack Lunch vs. Daniels Corporate Advisory |
| Aerius International vs. Sack Lunch Productions | Aerius International vs. Potash America | Aerius International vs. Blue Diamond Ventures | Aerius International vs. Daniels Corporate Advisory |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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