Correlation Between AECOM TECHNOLOGY and ENSTAR GROUP

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

By analyzing existing cross correlation between AECOM TECHNOLOGY and ENSTAR GROUP LTD, you can compare the effects of market volatilities on AECOM TECHNOLOGY and ENSTAR GROUP 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 ENSTAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and ENSTAR GROUP.

Diversification Opportunities for AECOM TECHNOLOGY and ENSTAR GROUP

-0.74

Correlation Coefficient

AECOM TECHNOLOGY  ENSTAR GROUP

Pay attention - limited upside

The 3 months correlation between AECOM and ENSTAR is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and ENSTAR GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENSTAR GROUP LTD 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 ENSTAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENSTAR GROUP LTD has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and ENSTAR GROUP go up and down completely randomly.

Pair Corralation between AECOM TECHNOLOGY and ENSTAR GROUP

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 2.02 times more return on investment than ENSTAR GROUP. However, AECOM TECHNOLOGY is 2.02 times more volatile than ENSTAR GROUP LTD. It trades about 0.15 of its potential returns per unit of risk. ENSTAR GROUP LTD is currently generating about -0.09 per unit of risk. If you would invest  8,530  in AECOM TECHNOLOGY on April 25, 2025 and sell it today you would earn a total of  1,020  from holding AECOM TECHNOLOGY or generate 11.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	77.78%
Values	Daily Returns

AECOM TECHNOLOGY  vs.  ENSTAR GROUP LTD

AECOM TECHNOLOGY

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AECOM TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ENSTAR GROUP LTD

Risk-Adjusted Performance

Very Weak

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

Pair Trading with AECOM TECHNOLOGY and ENSTAR GROUP

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

The idea behind AECOM TECHNOLOGY and ENSTAR GROUP LTD 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.