Correlation Between AECOM TECHNOLOGY and Globex Mining

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

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

Diversification Opportunities for AECOM TECHNOLOGY and Globex Mining

0.04

Correlation Coefficient

AECOM TECHNOLOGY  Globex Mining

Significant diversification

The 3 months correlation between AECOM and Globex is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and Globex Mining go up and down completely randomly.

Pair Corralation between AECOM TECHNOLOGY and Globex Mining

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.22 times less return on investment than Globex Mining. But when comparing it to its historical volatility, AECOM TECHNOLOGY is 1.24 times less risky than Globex Mining. It trades about 0.04 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Globex Mining Enterprises on March 19, 2025 and sell it today you would earn a total of  15.00  from holding Globex Mining Enterprises or generate 20.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AECOM TECHNOLOGY  vs.  Globex Mining Enterprises

AECOM TECHNOLOGY

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AECOM TECHNOLOGY exhibited solid returns over the last few months and may actually be approaching a breakup point.

Globex Mining Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globex Mining Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AECOM TECHNOLOGY and Globex Mining

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

The idea behind AECOM TECHNOLOGY and Globex Mining Enterprises 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.