Correlation Between Sure Tech and Aerodrome
Can any of the company-specific risk be diversified away by investing in both Sure Tech and Aerodrome 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 Sure Tech and Aerodrome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sure Tech Investments LP and Aerodrome Group, you can compare the effects of market volatilities on Sure Tech and Aerodrome 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 Sure Tech with a short position of Aerodrome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Aerodrome.
Diversification Opportunities for Sure Tech and Aerodrome
Very good diversification
The 3 months correlation between Sure and Aerodrome is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Aerodrome Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerodrome Group and Sure Tech 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 Sure Tech Investments LP are associated (or correlated) with Aerodrome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerodrome Group has no effect on the direction of Sure Tech i.e., Sure Tech and Aerodrome go up and down completely randomly.
Pair Corralation between Sure Tech and Aerodrome
Assuming the 90 days trading horizon Sure Tech Investments LP is expected to under-perform the Aerodrome. But the stock apears to be less risky and, when comparing its historical volatility, Sure Tech Investments LP is 3.4 times less risky than Aerodrome. The stock trades about -0.45 of its potential returns per unit of risk. The Aerodrome Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,670 in Aerodrome Group on October 25, 2024 and sell it today you would earn a total of 1,140 from holding Aerodrome Group or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sure Tech Investments LP vs. Aerodrome Group
Performance |
| Timeline |
| Sure Tech Investments |
| Aerodrome Group |
Sure Tech and Aerodrome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sure Tech and Aerodrome
The main advantage of trading using opposite Sure Tech and Aerodrome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sure Tech position performs unexpectedly, Aerodrome 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 Aerodrome will offset losses from the drop in Aerodrome's long position.| Sure Tech vs. Electreon Wireless | Sure Tech vs. Elbit Medical Technologies | Sure Tech vs. Veridis Environment | Sure Tech vs. Hiron Trade Investments Industrial |
| Aerodrome vs. Harel Insurance Investments | Aerodrome vs. Aura Investments | Aerodrome vs. Batm Advanced Communications | Aerodrome vs. Mobile Max M |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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