Correlation Between AECOM TECHNOLOGY and CrowdStrike Holdings
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AECOM TECHNOLOGY vs. CrowdStrike Holdings
Performance |
Timeline |
AECOM TECHNOLOGY |
CrowdStrike Holdings |
AECOM TECHNOLOGY and CrowdStrike Holdings Volatility Contrast
Predicted Return Density |
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.AECOM TECHNOLOGY vs. GungHo Online Entertainment | ||
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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