Correlation Between Aspen Technology and EAU TECHNOLOGIES

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Can any of the company-specific risk be diversified away by investing in both Aspen Technology and EAU TECHNOLOGIES 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 EAU TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Technology and EAU TECHNOLOGIES INC, you can compare the effects of market volatilities on Aspen Technology and EAU TECHNOLOGIES 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 EAU TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Technology and EAU TECHNOLOGIES.

Diversification Opportunities for Aspen Technology and EAU TECHNOLOGIES

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Aspen Technology and EAU TECHNOLOGIES

If you would invest  20,785  in Aspen Technology on July 5, 2022 and sell it today you would earn a total of  3,035  from holding Aspen Technology or generate 14.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy60.0%
ValuesDaily Returns

Aspen Technology  vs.  EAU TECHNOLOGIES INC

 Performance (%) 
       Timeline  
Aspen Technology 
Aspen Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aspen Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Aspen Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Aspen Price Channel

EAU TECHNOLOGIES INC 
EAU TECHNOLOGIES Performance
0 of 100
Over the last 90 days EAU TECHNOLOGIES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EAU TECHNOLOGIES is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Aspen Technology and EAU TECHNOLOGIES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aspen Technology and EAU TECHNOLOGIES

The main advantage of trading using opposite Aspen Technology and EAU TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Technology position performs unexpectedly, EAU TECHNOLOGIES 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 EAU TECHNOLOGIES will offset losses from the drop in EAU TECHNOLOGIES's long position.
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The idea behind Aspen Technology and EAU TECHNOLOGIES INC 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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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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