Correlation Between Aecom Technology and SEACOR Marine
Can any of the company-specific risk be diversified away by investing in both Aecom Technology and SEACOR Marine 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 SEACOR Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecom Technology and SEACOR Marine Holdings, you can compare the effects of market volatilities on Aecom Technology and SEACOR Marine 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 SEACOR Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecom Technology and SEACOR Marine.
Diversification Opportunities for Aecom Technology and SEACOR Marine
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aecom and SEACOR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aecom Technology and SEACOR Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEACOR Marine Holdings 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 SEACOR Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEACOR Marine Holdings has no effect on the direction of Aecom Technology i.e., Aecom Technology and SEACOR Marine go up and down completely randomly.
Pair Corralation between Aecom Technology and SEACOR Marine
Considering the 90-day investment horizon Aecom Technology is expected to generate 2.68 times less return on investment than SEACOR Marine. But when comparing it to its historical volatility, Aecom Technology is 2.29 times less risky than SEACOR Marine. It trades about 0.04 of its potential returns per unit of risk. SEACOR Marine Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 786.00 in SEACOR Marine Holdings on December 29, 2023 and sell it today you would earn a total of 609.00 from holding SEACOR Marine Holdings or generate 77.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aecom Technology vs. SEACOR Marine Holdings
Performance |
Timeline |
Aecom Technology |
SEACOR Marine Holdings |
Aecom Technology and SEACOR Marine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aecom Technology and SEACOR Marine
The main advantage of trading using opposite Aecom Technology and SEACOR Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecom Technology position performs unexpectedly, SEACOR Marine 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 SEACOR Marine will offset losses from the drop in SEACOR Marine's long position.Aecom Technology vs. Dycom Industries | Aecom Technology vs. Innovate Corp | Aecom Technology vs. Matrix Service Co | Aecom Technology vs. MYR Group |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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