Correlation Between Immersion and Aecom Technology
Can any of the company-specific risk be diversified away by investing in both Immersion 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 Immersion and Aecom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immersion and Aecom Technology, you can compare the effects of market volatilities on Immersion 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 Immersion with a short position of Aecom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immersion and Aecom Technology.
Diversification Opportunities for Immersion and Aecom Technology
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Immersion and Aecom is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Immersion and Aecom Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecom Technology and Immersion 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 Immersion 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 Immersion i.e., Immersion and Aecom Technology go up and down completely randomly.
Pair Corralation between Immersion and Aecom Technology
Given the investment horizon of 90 days Immersion is expected to under-perform the Aecom Technology. In addition to that, Immersion is 1.27 times more volatile than Aecom Technology. It trades about -0.15 of its total potential returns per unit of risk. Aecom Technology is currently generating about -0.09 per unit of volatility. If you would invest 9,561 in Aecom Technology on January 20, 2024 and sell it today you would lose (237.00) from holding Aecom Technology or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immersion vs. Aecom Technology
Performance |
| Timeline |
| Immersion |
| Aecom Technology |
Immersion and Aecom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immersion and Aecom Technology
The main advantage of trading using opposite Immersion and Aecom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immersion 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.| Immersion vs. LG Display Co | Immersion vs. Sony Corp | Immersion vs. Sonos Inc | Immersion vs. Vizio Holding 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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