Correlation Between Aerius International and Sgd Holdings

Can any of the company-specific risk be diversified away by investing in both Aerius International and Sgd Holdings 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 Aerius International and Sgd Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aerius International and Sgd Holdings, you can compare the effects of market volatilities on Aerius International and Sgd Holdings 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 Aerius International with a short position of Sgd Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerius International and Sgd Holdings.

Diversification Opportunities for Aerius International and Sgd Holdings

-0.05

Correlation Coefficient

Aerius International  Sgd Holdings

Good diversification

The 3 months correlation between Aerius and Sgd is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aerius International and Sgd Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sgd Holdings and Aerius International 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 Aerius International are associated (or correlated) with Sgd Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sgd Holdings has no effect on the direction of Aerius International i.e., Aerius International and Sgd Holdings go up and down completely randomly.

Pair Corralation between Aerius International and Sgd Holdings

Given the investment horizon of 90 days Aerius International is expected to generate 0.87 times more return on investment than Sgd Holdings. However, Aerius International is 1.14 times less risky than Sgd Holdings. It trades about 0.08 of its potential returns per unit of risk. Sgd Holdings is currently generating about 0.03 per unit of risk. If you would invest  0.17  in Aerius International on December 27, 2024 and sell it today you would earn a total of  0.04  from holding Aerius International or generate 23.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Aerius International  vs.  Sgd Holdings

Aerius International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aerius International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Aerius International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sgd Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sgd Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Sgd Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aerius International and Sgd Holdings

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

The idea behind Aerius International and Sgd 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 Stocks Directory module to find actively traded stocks across global markets.