Correlation Between SIEM OFFSHORE and AeroVironment

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

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

Diversification Opportunities for SIEM OFFSHORE and AeroVironment

0.29

Correlation Coefficient

SIEM OFFSHORE  AeroVironment

Modest diversification

The 3 months correlation between SIEM and AeroVironment is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and AeroVironment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroVironment and SIEM OFFSHORE 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 SIEM OFFSHORE NEW are associated (or correlated) with AeroVironment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroVironment has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and AeroVironment go up and down completely randomly.

Pair Corralation between SIEM OFFSHORE and AeroVironment

Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to generate 1.21 times more return on investment than AeroVironment. However, SIEM OFFSHORE is 1.21 times more volatile than AeroVironment. It trades about 0.01 of its potential returns per unit of risk. AeroVironment is currently generating about -0.03 per unit of risk. If you would invest  212.00  in SIEM OFFSHORE NEW on October 25, 2024 and sell it today you would lose (10.00) from holding SIEM OFFSHORE NEW or give up 4.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

SIEM OFFSHORE NEW  vs.  AeroVironment

SIEM OFFSHORE NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIEM OFFSHORE NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, SIEM OFFSHORE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AeroVironment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AeroVironment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SIEM OFFSHORE and AeroVironment

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

The idea behind SIEM OFFSHORE NEW and AeroVironment 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.