Correlation Between Timken and AES Corp
Can any of the company-specific risk be diversified away by investing in both Timken and AES Corp 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 Timken and AES Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timken Company and AES Corp Unit, you can compare the effects of market volatilities on Timken and AES Corp 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 Timken with a short position of AES Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timken and AES Corp.
Diversification Opportunities for Timken and AES Corp
Very good diversification
The 3 months correlation between Timken and AES is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Timken Company and AES Corp Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES Corp Unit and Timken 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 Timken Company are associated (or correlated) with AES Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES Corp Unit has no effect on the direction of Timken i.e., Timken and AES Corp go up and down completely randomly.
Pair Corralation between Timken and AES Corp
If you would invest 8,496 in AES Corp Unit on September 5, 2024 and sell it today you would earn a total of 0.00 from holding AES Corp Unit or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Timken Company vs. AES Corp Unit
Performance |
| Timeline |
| Timken Company |
| AES Corp Unit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Timken and AES Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timken and AES Corp
The main advantage of trading using opposite Timken and AES Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timken position performs unexpectedly, AES Corp 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 AES Corp will offset losses from the drop in AES Corp's long position.| Timken vs. AB SKF | Timken vs. Aquagold International | Timken vs. Thrivent High Yield | Timken vs. Morningstar Unconstrained Allocation |
| AES Corp vs. Acumen Pharmaceuticals | AES Corp vs. Marchex | AES Corp vs. Tarsus Pharmaceuticals | AES Corp vs. Xunlei Ltd Adr |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |