Correlation Between Spirax-Sarco Engineering and Aumann AG
Can any of the company-specific risk be diversified away by investing in both Spirax-Sarco Engineering and Aumann AG 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 Spirax-Sarco Engineering and Aumann AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirax Sarco Engineering PLC and Aumann AG, you can compare the effects of market volatilities on Spirax-Sarco Engineering and Aumann AG 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 Spirax-Sarco Engineering with a short position of Aumann AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirax-Sarco Engineering and Aumann AG.
Diversification Opportunities for Spirax-Sarco Engineering and Aumann AG
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spirax-Sarco and Aumann is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Spirax Sarco Engineering PLC and Aumann AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aumann AG and Spirax-Sarco Engineering 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 Spirax Sarco Engineering PLC are associated (or correlated) with Aumann AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aumann AG has no effect on the direction of Spirax-Sarco Engineering i.e., Spirax-Sarco Engineering and Aumann AG go up and down completely randomly.
Pair Corralation between Spirax-Sarco Engineering and Aumann AG
If you would invest 1,300 in Aumann AG on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Aumann AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Spirax Sarco Engineering PLC vs. Aumann AG
Performance |
| Timeline |
| Spirax-Sarco Engineering |
| Aumann AG |
Spirax-Sarco Engineering and Aumann AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirax-Sarco Engineering and Aumann AG
The main advantage of trading using opposite Spirax-Sarco Engineering and Aumann AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirax-Sarco Engineering position performs unexpectedly, Aumann AG 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 Aumann AG will offset losses from the drop in Aumann AG's long position.| Spirax-Sarco Engineering vs. Atlas Copco AB | Spirax-Sarco Engineering vs. Aumann AG | Spirax-Sarco Engineering vs. Amaero International | Spirax-Sarco Engineering vs. Arista Power |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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