Correlation Between Willdan and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both Willdan 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 Willdan and Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willdan Group and Aeries Technology, you can compare the effects of market volatilities on Willdan 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 Willdan with a short position of Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willdan and Aeries Technology.
Diversification Opportunities for Willdan and Aeries Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Willdan and Aeries is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Willdan Group and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and Willdan 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 Willdan Group 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 Willdan i.e., Willdan and Aeries Technology go up and down completely randomly.
Pair Corralation between Willdan and Aeries Technology
Given the investment horizon of 90 days Willdan Group is expected to generate 0.63 times more return on investment than Aeries Technology. However, Willdan Group is 1.59 times less risky than Aeries Technology. It trades about 0.08 of its potential returns per unit of risk. Aeries Technology is currently generating about -0.06 per unit of risk. If you would invest 1,523 in Willdan Group on August 29, 2024 and sell it today you would earn a total of 2,795 from holding Willdan Group or generate 183.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willdan Group vs. Aeries Technology
Performance |
| Timeline |
| Willdan Group |
| Aeries Technology |
Willdan and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willdan and Aeries Technology
The main advantage of trading using opposite Willdan and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willdan 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.| Willdan vs. SNC Lavalin Group | Willdan vs. WSP Global | Willdan vs. Comfort Systems USA | Willdan vs. MYR Group |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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