Correlation Between ASPEN TECHINC and Australian Agricultural
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC and Australian Agricultural 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 ASPEN TECHINC and Australian Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and Australian Agricultural, you can compare the effects of market volatilities on ASPEN TECHINC and Australian Agricultural 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 ASPEN TECHINC with a short position of Australian Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and Australian Agricultural.
Diversification Opportunities for ASPEN TECHINC and Australian Agricultural
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASPEN and Australian is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and Australian Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Agricultural and ASPEN TECHINC 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 ASPEN TECHINC DL are associated (or correlated) with Australian Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Agricultural has no effect on the direction of ASPEN TECHINC i.e., ASPEN TECHINC and Australian Agricultural go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and Australian Agricultural
Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 0.52 times more return on investment than Australian Agricultural. However, ASPEN TECHINC DL is 1.93 times less risky than Australian Agricultural. It trades about 0.44 of its potential returns per unit of risk. Australian Agricultural is currently generating about -0.08 per unit of risk. If you would invest 23,400 in ASPEN TECHINC DL on October 15, 2024 and sell it today you would earn a total of 800.00 from holding ASPEN TECHINC DL or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. Australian Agricultural
Performance |
| Timeline |
| ASPEN TECHINC DL |
| Australian Agricultural |
ASPEN TECHINC and Australian Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and Australian Agricultural
The main advantage of trading using opposite ASPEN TECHINC and Australian Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC position performs unexpectedly, Australian Agricultural 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 Australian Agricultural will offset losses from the drop in Australian Agricultural's long position.| ASPEN TECHINC vs. AM EAGLE OUTFITTERS | ASPEN TECHINC vs. Urban Outfitters | ASPEN TECHINC vs. GRENKELEASING Dusseldorf | ASPEN TECHINC vs. Forsys Metals Corp |
| Australian Agricultural vs. ASPEN TECHINC DL | Australian Agricultural vs. GEAR4MUSIC LS 10 | Australian Agricultural vs. Addtech AB | Australian Agricultural vs. Coffee Holding Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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