Correlation Between VSE and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both VSE and Aeries 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 VSE and Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VSE Corporation and Aeries Technology, you can compare the effects of market volatilities on VSE and Aeries 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 VSE with a short position of Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of VSE and Aeries Technology.
Diversification Opportunities for VSE and Aeries Technology
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VSE and Aeries is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and VSE 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 VSE Corporation are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of VSE i.e., VSE and Aeries Technology go up and down completely randomly.
Pair Corralation between VSE and Aeries Technology
Given the investment horizon of 90 days VSE Corporation is expected to generate 0.46 times more return on investment than Aeries Technology. However, VSE Corporation is 2.18 times less risky than Aeries Technology. It trades about 0.11 of its potential returns per unit of risk. Aeries Technology is currently generating about -0.03 per unit of risk. If you would invest 8,169 in VSE Corporation on August 29, 2024 and sell it today you would earn a total of 3,330 from holding VSE Corporation or generate 40.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VSE Corp. vs. Aeries Technology
Performance |
| Timeline |
| VSE Corporation |
| Aeries Technology |
VSE and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VSE and Aeries Technology
The main advantage of trading using opposite VSE and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VSE position performs unexpectedly, Aeries 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.| VSE vs. Park Electrochemical | VSE vs. Innovative Solutions and | VSE vs. Curtiss Wright | VSE vs. National Presto Industries |
| Aeries Technology vs. Sun Country Airlines | Aeries Technology vs. Skechers USA | Aeries Technology vs. Tower One Wireless | Aeries Technology vs. Bausch Lomb Corp |
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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