Correlation Between 24SEVENOFFICE GROUP and AECOM TECHNOLOGY

Can any of the company-specific risk be diversified away by investing in both 24SEVENOFFICE GROUP and AECOM TECHNOLOGY 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 24SEVENOFFICE GROUP and AECOM TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 24SEVENOFFICE GROUP AB and AECOM TECHNOLOGY, you can compare the effects of market volatilities on 24SEVENOFFICE GROUP and AECOM TECHNOLOGY 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 24SEVENOFFICE GROUP with a short position of AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of 24SEVENOFFICE GROUP and AECOM TECHNOLOGY.

Diversification Opportunities for 24SEVENOFFICE GROUP and AECOM TECHNOLOGY

0.26

Correlation Coefficient

24SEVENOFFICE GROUP  AECOM TECHNOLOGY

Modest diversification

The 3 months correlation between 24SEVENOFFICE and AECOM is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding 24SEVENOFFICE GROUP AB and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP AB are associated (or correlated) with AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of 24SEVENOFFICE GROUP i.e., 24SEVENOFFICE GROUP and AECOM TECHNOLOGY go up and down completely randomly.

Pair Corralation between 24SEVENOFFICE GROUP and AECOM TECHNOLOGY

Assuming the 90 days horizon 24SEVENOFFICE GROUP AB is expected to under-perform the AECOM TECHNOLOGY. In addition to that, 24SEVENOFFICE GROUP is 2.21 times more volatile than AECOM TECHNOLOGY. It trades about -0.07 of its total potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.1 per unit of volatility. If you would invest  9,626  in AECOM TECHNOLOGY on October 26, 2024 and sell it today you would earn a total of  974.00  from holding AECOM TECHNOLOGY or generate 10.12% return on investment over 90 days.

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

24SEVENOFFICE GROUP AB  vs.  AECOM TECHNOLOGY

24SEVENOFFICE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 24SEVENOFFICE GROUP AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AECOM TECHNOLOGY

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AECOM TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 24SEVENOFFICE GROUP and AECOM TECHNOLOGY

The main advantage of trading using opposite 24SEVENOFFICE GROUP and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 24SEVENOFFICE GROUP position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.

The idea behind 24SEVENOFFICE GROUP AB and AECOM TECHNOLOGY 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.