Correlation Between Ansell and AAON

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

By analyzing existing cross correlation between Ansell Ltd ADR and AAON Inc, you can compare the effects of market volatilities on Ansell and AAON 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 Ansell with a short position of AAON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ansell and AAON.

Diversification Opportunities for Ansell and AAON

0.0

Correlation Coefficient

Ansell  AAON

Pay attention - limited upside

The 3 months correlation between Ansell and AAON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ansell Ltd ADR and AAON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAON Inc and Ansell 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 Ansell Ltd ADR are associated (or correlated) with AAON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAON Inc has no effect on the direction of Ansell i.e., Ansell and AAON go up and down completely randomly.

Pair Corralation between Ansell and AAON

If you would invest (100.00) in Ansell Ltd ADR on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Ansell Ltd ADR or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ansell Ltd ADR  vs.  AAON Inc

Ansell Ltd ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ansell Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Ansell is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

AAON Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AAON Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ansell and AAON

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

The idea behind Ansell Ltd ADR and AAON Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.