Correlation Between SHIMANO INC and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both SHIMANO INC and AECOM 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 SHIMANO INC and AECOM TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIMANO INC UNSPADR10 and AECOM TECHNOLOGY, you can compare the effects of market volatilities on SHIMANO INC and AECOM 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 SHIMANO INC with a short position of AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIMANO INC and AECOM TECHNOLOGY.
Diversification Opportunities for SHIMANO INC and AECOM TECHNOLOGY
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIMANO and AECOM is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SHIMANO INC UNSPADR10 and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY and SHIMANO INC 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 SHIMANO INC UNSPADR10 are associated (or correlated) with AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of SHIMANO INC i.e., SHIMANO INC and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between SHIMANO INC and AECOM TECHNOLOGY
Assuming the 90 days trading horizon SHIMANO INC UNSPADR10 is expected to generate 0.95 times more return on investment than AECOM TECHNOLOGY. However, SHIMANO INC UNSPADR10 is 1.06 times less risky than AECOM TECHNOLOGY. It trades about -0.02 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about -0.37 per unit of risk. If you would invest 1,530 in SHIMANO INC UNSPADR10 on March 12, 2024 and sell it today you would lose (10.00) from holding SHIMANO INC UNSPADR10 or give up 0.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SHIMANO INC UNSPADR10 vs. AECOM TECHNOLOGY
Performance |
Timeline |
SHIMANO INC UNSPADR10 |
AECOM TECHNOLOGY |
SHIMANO INC and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SHIMANO INC and AECOM TECHNOLOGY
The main advantage of trading using opposite SHIMANO INC and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIMANO INC position performs unexpectedly, AECOM 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.SHIMANO INC vs. NMI Holdings | SHIMANO INC vs. Origin Agritech | SHIMANO INC vs. SIVERS SEMICONDUCTORS AB | SHIMANO INC vs. Talanx AG |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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