Correlation Between Aspen Technology and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Aspen Technology and Growth Fund 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 Technology and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Technology and Growth Fund Of, you can compare the effects of market volatilities on Aspen Technology and Growth Fund 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 Technology with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Technology and Growth Fund.
Diversification Opportunities for Aspen Technology and Growth Fund
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aspen and Growth is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Technology and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Aspen Technology 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 Technology are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Aspen Technology i.e., Aspen Technology and Growth Fund go up and down completely randomly.
Pair Corralation between Aspen Technology and Growth Fund
Given the investment horizon of 90 days Aspen Technology is expected to generate 1.76 times more return on investment than Growth Fund. However, Aspen Technology is 1.76 times more volatile than Growth Fund Of. It trades about 0.03 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.05 per unit of risk. If you would invest 16,325 in Aspen Technology on January 26, 2024 and sell it today you would earn a total of 3,386 from holding Aspen Technology or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Technology vs. Growth Fund Of
Performance |
| Timeline |
| Aspen Technology |
| Growth Fund |
Aspen Technology and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Technology and Growth Fund
The main advantage of trading using opposite Aspen Technology and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Technology position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Aspen Technology vs. Bentley SystemsInc | Aspen Technology vs. Tyler Technologies | Aspen Technology vs. Blackbaud | Aspen Technology vs. SSC Technologies Holdings |
| Growth Fund vs. Amana Income Fund | Growth Fund vs. Amana Income Fund | Growth Fund vs. Amana Developing World | Growth Fund vs. Amana Developing World |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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