Correlation Between Aeries Technology and Roma Green

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

By analyzing existing cross correlation between Aeries Technology and Roma Green Finance, you can compare the effects of market volatilities on Aeries Technology and Roma Green 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 Aeries Technology with a short position of Roma Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeries Technology and Roma Green.

Diversification Opportunities for Aeries Technology and Roma Green

-0.44

Correlation Coefficient

Aeries Technology  Roma Green

Very good diversification

The 3 months correlation between Aeries and Roma is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aeries Technology and Roma Green Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roma Green Finance and Aeries 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 Aeries Technology are associated (or correlated) with Roma Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roma Green Finance has no effect on the direction of Aeries Technology i.e., Aeries Technology and Roma Green go up and down completely randomly.

Pair Corralation between Aeries Technology and Roma Green

Assuming the 90 days horizon Aeries Technology is expected to generate 3.12 times more return on investment than Roma Green. However, Aeries Technology is 3.12 times more volatile than Roma Green Finance. It trades about 0.07 of its potential returns per unit of risk. Roma Green Finance is currently generating about 0.04 per unit of risk. If you would invest  13.00  in Aeries Technology on February 14, 2025 and sell it today you would lose (11.10) from holding Aeries Technology or give up 85.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	49.11%
Values	Daily Returns

Aeries Technology  vs.  Roma Green Finance

Aeries Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aeries Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Aeries Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Roma Green Finance

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Roma Green Finance are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Roma Green sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aeries Technology and Roma Green

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

The idea behind Aeries Technology and Roma Green Finance 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.