Correlation Between Aramark Holdings and Newron Sport

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

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

Diversification Opportunities for Aramark Holdings and Newron Sport

0.03

Correlation Coefficient

Aramark Holdings  Newron Sport

Significant diversification

The 3 months correlation between Aramark and Newron is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aramark Holdings and Newron Sport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newron Sport and Aramark Holdings 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 Aramark Holdings are associated (or correlated) with Newron Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newron Sport has no effect on the direction of Aramark Holdings i.e., Aramark Holdings and Newron Sport go up and down completely randomly.

Pair Corralation between Aramark Holdings and Newron Sport

If you would invest  3,765  in Aramark Holdings on October 26, 2024 and sell it today you would earn a total of  112.00  from holding Aramark Holdings or generate 2.97% return on investment over 90 days.

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

Aramark Holdings  vs.  Newron Sport

Aramark Holdings

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aramark Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, Aramark Holdings is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Newron Sport

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Newron Sport are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Newron Sport unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aramark Holdings and Newron Sport

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

The idea behind Aramark Holdings and Newron Sport 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.