Correlation Between Aedas Homes and SSC Technologies

Can any of the company-specific risk be diversified away by investing in both Aedas Homes and SSC 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 Aedas Homes and SSC Technologies 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 SSC Technologies Holdings, you can compare the effects of market volatilities on Aedas Homes and SSC 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 Aedas Homes with a short position of SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and SSC Technologies.

Diversification Opportunities for Aedas Homes and SSC Technologies

-0.42

Correlation Coefficient

Aedas Homes  SSC Technologies

Very good diversification

The 3 months correlation between Aedas and SSC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and SSC Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies Holdings 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 SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Holdings has no effect on the direction of Aedas Homes i.e., Aedas Homes and SSC Technologies go up and down completely randomly.

Pair Corralation between Aedas Homes and SSC Technologies

Assuming the 90 days horizon Aedas Homes SA is expected to generate 1.37 times more return on investment than SSC Technologies. However, Aedas Homes is 1.37 times more volatile than SSC Technologies Holdings. It trades about 0.11 of its potential returns per unit of risk. SSC Technologies Holdings is currently generating about 0.07 per unit of risk. If you would invest  985.00  in Aedas Homes SA on September 28, 2024 and sell it today you would earn a total of  1,440  from holding Aedas Homes SA or generate 146.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aedas Homes SA  vs.  SSC Technologies Holdings

Aedas Homes SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

SSC Technologies Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SSC Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aedas Homes and SSC Technologies

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

The idea behind Aedas Homes SA and SSC Technologies Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.