Correlation Between Aedas Homes and H M
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and H M 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 Aedas Homes and H M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and H M Hennes, you can compare the effects of market volatilities on Aedas Homes and H M 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 Aedas Homes with a short position of H M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and H M.
Diversification Opportunities for Aedas Homes and H M
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aedas and HMSB is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of Aedas Homes i.e., Aedas Homes and H M go up and down completely randomly.
Pair Corralation between Aedas Homes and H M
Assuming the 90 days horizon Aedas Homes SA is expected to generate 1.11 times more return on investment than H M. However, Aedas Homes is 1.11 times more volatile than H M Hennes. It trades about 0.14 of its potential returns per unit of risk. H M Hennes is currently generating about -0.01 per unit of risk. If you would invest 2,339 in Aedas Homes SA on December 2, 2024 and sell it today you would earn a total of 381.00 from holding Aedas Homes SA or generate 16.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aedas Homes SA vs. H M Hennes
Performance |
Timeline |
Aedas Homes SA |
H M Hennes |
Aedas Homes and H M Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aedas Homes and H M
The main advantage of trading using opposite Aedas Homes and H M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, H M 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 H M will offset losses from the drop in H M's long position.Aedas Homes vs. KINGBOARD CHEMICAL | Aedas Homes vs. Soken Chemical Engineering | Aedas Homes vs. SIERRA METALS | Aedas Homes vs. SILICON LABORATOR |
H M vs. Japan Medical Dynamic | H M vs. MEDICAL FACILITIES NEW | H M vs. China Medical System | H M vs. Advanced Medical Solutions |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |