Correlation Between AECOM TECHNOLOGY and CyberAgent
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY and CyberAgent 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 CyberAgent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and CyberAgent, you can compare the effects of market volatilities on AECOM TECHNOLOGY and CyberAgent 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 CyberAgent. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and CyberAgent.
Diversification Opportunities for AECOM TECHNOLOGY and CyberAgent
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AECOM and CyberAgent is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent 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 CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and CyberAgent go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and CyberAgent
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.39 times less return on investment than CyberAgent. But when comparing it to its historical volatility, AECOM TECHNOLOGY is 1.93 times less risky than CyberAgent. It trades about 0.2 of its potential returns per unit of risk. CyberAgent is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 720.00 in CyberAgent on April 23, 2025 and sell it today you would earn a total of 170.00 from holding CyberAgent or generate 23.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
AECOM TECHNOLOGY vs. CyberAgent
Performance |
Timeline |
AECOM TECHNOLOGY |
CyberAgent |
AECOM TECHNOLOGY and CyberAgent Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AECOM TECHNOLOGY and CyberAgent
The main advantage of trading using opposite AECOM TECHNOLOGY and CyberAgent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY position performs unexpectedly, CyberAgent 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 CyberAgent will offset losses from the drop in CyberAgent's long position.AECOM TECHNOLOGY vs. TELECOM ITALRISP ADR10 | AECOM TECHNOLOGY vs. ANTA Sports Products | AECOM TECHNOLOGY vs. TITANIUM TRANSPORTGROUP | AECOM TECHNOLOGY vs. COMPUTERSHARE |
CyberAgent vs. Microchip Technology Incorporated | CyberAgent vs. China Yongda Automobiles | CyberAgent vs. AECOM TECHNOLOGY | CyberAgent vs. Amkor Technology |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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