Correlation Between TransAlta Corp and Aspen Technology
Can any of the company-specific risk be diversified away by investing in both TransAlta Corp and Aspen Technology 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 TransAlta Corp and Aspen Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAlta Corp and Aspen Technology, you can compare the effects of market volatilities on TransAlta Corp and Aspen Technology 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 TransAlta Corp with a short position of Aspen Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAlta Corp and Aspen Technology.
Diversification Opportunities for TransAlta Corp and Aspen Technology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TransAlta and Aspen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding TransAlta Corp and Aspen Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Technology and TransAlta Corp 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 TransAlta Corp are associated (or correlated) with Aspen Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Technology has no effect on the direction of TransAlta Corp i.e., TransAlta Corp and Aspen Technology go up and down completely randomly.
Pair Corralation between TransAlta Corp and Aspen Technology
Considering the 90-day investment horizon TransAlta Corp is expected to under-perform the Aspen Technology. In addition to that, TransAlta Corp is 5.78 times more volatile than Aspen Technology. It trades about -0.16 of its total potential returns per unit of risk. Aspen Technology is currently generating about 0.29 per unit of volatility. If you would invest 24,995 in Aspen Technology on November 3, 2024 and sell it today you would earn a total of 1,360 from holding Aspen Technology or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransAlta Corp vs. Aspen Technology
Performance |
| Timeline |
| TransAlta Corp |
| Aspen Technology |
TransAlta Corp and Aspen Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransAlta Corp and Aspen Technology
The main advantage of trading using opposite TransAlta Corp and Aspen Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAlta Corp position performs unexpectedly, Aspen Technology 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 Aspen Technology will offset losses from the drop in Aspen Technology's long position.| TransAlta Corp vs. Pampa Energia SA | TransAlta Corp vs. Vistra Energy Corp | TransAlta Corp vs. NRG Energy | TransAlta Corp vs. Power Assets Holdings |
| Aspen Technology vs. Bentley Systems | Aspen Technology vs. Tyler Technologies | Aspen Technology vs. Blackbaud | Aspen Technology vs. SSC Technologies Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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