Correlation Between Aecom Technology and Aenza SAA

Can any of the company-specific risk be diversified away by investing in both Aecom Technology and Aenza SAA 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 Aecom Technology and Aenza SAA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aecom Technology and Aenza SAA, you can compare the effects of market volatilities on Aecom Technology and Aenza SAA 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 Aecom Technology with a short position of Aenza SAA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecom Technology and Aenza SAA.

Diversification Opportunities for Aecom Technology and Aenza SAA

0.0

Correlation Coefficient

Aecom Technology  Aenza SAA

Pay attention - limited upside

The 3 months correlation between Aecom and Aenza is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aecom Technology and Aenza SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aenza SAA and Aecom 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 Aecom Technology are associated (or correlated) with Aenza SAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aenza SAA has no effect on the direction of Aecom Technology i.e., Aecom Technology and Aenza SAA go up and down completely randomly.

Pair Corralation between Aecom Technology and Aenza SAA

Considering the 90-day investment horizon Aecom Technology is expected to generate 0.3 times more return on investment than Aenza SAA. However, Aecom Technology is 3.37 times less risky than Aenza SAA. It trades about 0.05 of its potential returns per unit of risk. Aenza SAA is currently generating about -0.02 per unit of risk. If you would invest  6,878  in Aecom Technology on January 20, 2024 and sell it today you would earn a total of  2,446  from holding Aecom Technology or generate 35.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	81.26%
Values	Daily Returns

Aecom Technology  vs.  Aenza SAA

Aecom Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aecom Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Aecom Technology is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Aenza SAA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aenza SAA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aenza SAA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aecom Technology and Aenza SAA

The main advantage of trading using opposite Aecom Technology and Aenza SAA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecom Technology position performs unexpectedly, Aenza SAA 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 Aenza SAA will offset losses from the drop in Aenza SAA's long position.

The idea behind Aecom Technology and Aenza SAA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.