Correlation Between Aecom Technology and Ming Shing
Can any of the company-specific risk be diversified away by investing in both Aecom Technology and Ming Shing 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 Aecom Technology and Ming Shing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecom Technology and Ming Shing Group, you can compare the effects of market volatilities on Aecom Technology and Ming Shing 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 Aecom Technology with a short position of Ming Shing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecom Technology and Ming Shing.
Diversification Opportunities for Aecom Technology and Ming Shing
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aecom and Ming is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aecom Technology and Ming Shing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Shing Group and Aecom 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 Aecom Technology are associated (or correlated) with Ming Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Shing Group has no effect on the direction of Aecom Technology i.e., Aecom Technology and Ming Shing go up and down completely randomly.
Pair Corralation between Aecom Technology and Ming Shing
Considering the 90-day investment horizon Aecom Technology is expected to generate 0.1 times more return on investment than Ming Shing. However, Aecom Technology is 9.74 times less risky than Ming Shing. It trades about -0.48 of its potential returns per unit of risk. Ming Shing Group is currently generating about -0.25 per unit of risk. If you would invest 11,689 in Aecom Technology on September 24, 2024 and sell it today you would lose (890.00) from holding Aecom Technology or give up 7.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Aecom Technology vs. Ming Shing Group
Performance |
Timeline |
Aecom Technology |
Ming Shing Group |
Aecom Technology and Ming Shing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aecom Technology and Ming Shing
The main advantage of trading using opposite Aecom Technology and Ming Shing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecom Technology position performs unexpectedly, Ming Shing 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 Ming Shing will offset losses from the drop in Ming Shing's long position.Aecom Technology vs. Innovate Corp | Aecom Technology vs. Energy Services | Aecom Technology vs. Wang Lee Group, | Aecom Technology vs. Argan Inc |
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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 the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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