Correlation Between AECOM TECHNOLOGY and CrowdStrike Holdings

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Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and CrowdStrike 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 AECOM TECHNOLOGY and CrowdStrike Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and CrowdStrike Holdings, you can compare the effects of market volatilities on AECOM TECHNOLOGY and CrowdStrike 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 AECOM TECHNOLOGY with a short position of CrowdStrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and CrowdStrike Holdings.

Diversification Opportunities for AECOM TECHNOLOGY and CrowdStrike Holdings

AECOMCrowdStrikeDiversified AwayAECOMCrowdStrikeDiversified Away100%
-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AECOM and CrowdStrike is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and CrowdStrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrowdStrike Holdings 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 CrowdStrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrowdStrike Holdings has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and CrowdStrike Holdings go up and down completely randomly.

Pair Corralation between AECOM TECHNOLOGY and CrowdStrike Holdings

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the CrowdStrike Holdings. But the stock apears to be less risky and, when comparing its historical volatility, AECOM TECHNOLOGY is 2.42 times less risky than CrowdStrike Holdings. The stock trades about -0.22 of its potential returns per unit of risk. The CrowdStrike Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  34,595  in CrowdStrike Holdings on November 24, 2024 and sell it today you would earn a total of  6,935  from holding CrowdStrike Holdings or generate 20.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

AECOM TECHNOLOGY  vs.  CrowdStrike Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15E6Z 45C
       Timeline  
AECOM TECHNOLOGY 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days AECOM TECHNOLOGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9698100102104106108110
CrowdStrike Holdings 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CrowdStrike Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CrowdStrike Holdings reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb320340360380400420440

AECOM TECHNOLOGY and CrowdStrike Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.34-1.78-1.22-0.66-0.09710.441.01.562.122.68 0.050.100.150.20
JavaScript chart by amCharts 3.21.15E6Z 45C
       Returns  

Pair Trading with AECOM TECHNOLOGY and CrowdStrike Holdings

The main advantage of trading using opposite AECOM TECHNOLOGY and CrowdStrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, CrowdStrike 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 CrowdStrike Holdings will offset losses from the drop in CrowdStrike Holdings' long position.
The idea behind AECOM TECHNOLOGY and CrowdStrike 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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