Correlation Between Vow ASA and Aecon
Can any of the company-specific risk be diversified away by investing in both Vow ASA 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 Vow ASA and Aecon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vow ASA and Aecon Group, you can compare the effects of market volatilities on Vow ASA 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 Vow ASA with a short position of Aecon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vow ASA and Aecon.
Diversification Opportunities for Vow ASA and Aecon
Excellent diversification
The 3 months correlation between Vow and Aecon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Vow ASA and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group and Vow ASA 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 Vow ASA 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 Vow ASA i.e., Vow ASA and Aecon go up and down completely randomly.
Pair Corralation between Vow ASA and Aecon
Assuming the 90 days horizon Vow ASA is expected to under-perform the Aecon. In addition to that, Vow ASA is 2.61 times more volatile than Aecon Group. It trades about -0.1 of its total potential returns per unit of risk. Aecon Group is currently generating about 0.19 per unit of volatility. If you would invest 1,190 in Aecon Group on September 3, 2024 and sell it today you would earn a total of 913.00 from holding Aecon Group or generate 76.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vow ASA vs. Aecon Group
Performance |
| Timeline |
| Vow ASA |
| Aecon Group |
Vow ASA and Aecon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vow ASA and Aecon
The main advantage of trading using opposite Vow ASA and Aecon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vow ASA 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.| Vow ASA vs. Delta CleanTech | Vow ASA vs. CO2 Solutions | Vow ASA vs. TOMI Environmental Solutions | Vow ASA vs. Zurn Elkay Water |
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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