Correlation Between GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC

Can any of the company-specific risk be diversified away by investing in both GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC 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 GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GAZTRTECHNIUADR15EO01 and ASPEN TECHINC DL, you can compare the effects of market volatilities on GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC 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 GAZTRTECHNIUADR1/5EO01 with a short position of ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC.

Diversification Opportunities for GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC

0.17

Correlation Coefficient

GAZTRTECHNIUADR1/5EO01  ASPEN TECHINC

Average diversification

The 3 months correlation between GAZTRTECHNIUADR1/5EO01 and ASPEN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GAZTRTECHNIUADR15EO01 and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR15EO01 are associated (or correlated) with ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of GAZTRTECHNIUADR1/5EO01 i.e., GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC go up and down completely randomly.

Pair Corralation between GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC

Assuming the 90 days trading horizon GAZTRTECHNIUADR15EO01 is expected to generate 2.15 times more return on investment than ASPEN TECHINC. However, GAZTRTECHNIUADR1/5EO01 is 2.15 times more volatile than ASPEN TECHINC DL. It trades about 0.09 of its potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.02 per unit of risk. If you would invest  2,540  in GAZTRTECHNIUADR15EO01 on December 28, 2024 and sell it today you would earn a total of  340.00  from holding GAZTRTECHNIUADR15EO01 or generate 13.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	83.87%
Values	Daily Returns

GAZTRTECHNIUADR15EO01  vs.  ASPEN TECHINC DL

GAZTRTECHNIUADR1/5EO01

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GAZTRTECHNIUADR15EO01 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, GAZTRTECHNIUADR1/5EO01 reported solid returns over the last few months and may actually be approaching a breakup point.

ASPEN TECHINC DL

Risk-Adjusted Performance

Weak

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

Pair Trading with GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC

The main advantage of trading using opposite GAZTRTECHNIUADR1/5EO01 and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAZTRTECHNIUADR1/5EO01 position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.

The idea behind GAZTRTECHNIUADR15EO01 and ASPEN TECHINC DL 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.