Correlation Between Aspen Technology and AES
Can any of the company-specific risk be diversified away by investing in both Aspen Technology and AES 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 Aspen Technology and AES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Technology and The AES, you can compare the effects of market volatilities on Aspen Technology and AES 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 Aspen Technology with a short position of AES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Technology and AES.
Diversification Opportunities for Aspen Technology and AES
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aspen and AES is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Technology and The AES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES and Aspen 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 Aspen Technology are associated (or correlated) with AES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES has no effect on the direction of Aspen Technology i.e., Aspen Technology and AES go up and down completely randomly.
Pair Corralation between Aspen Technology and AES
Given the investment horizon of 90 days Aspen Technology is expected to generate 0.89 times more return on investment than AES. However, Aspen Technology is 1.13 times less risky than AES. It trades about 0.14 of its potential returns per unit of risk. The AES is currently generating about -0.02 per unit of risk. If you would invest 17,536 in Aspen Technology on January 20, 2024 and sell it today you would earn a total of 2,123 from holding Aspen Technology or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Technology vs. The AES
Performance |
| Timeline |
| Aspen Technology |
| AES |
Aspen Technology and AES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Technology and AES
The main advantage of trading using opposite Aspen Technology and AES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Technology position performs unexpectedly, AES 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 AES will offset losses from the drop in AES's long position.| Aspen Technology vs. Bentley SystemsInc | Aspen Technology vs. Tyler Technologies | Aspen Technology vs. Blackbaud | Aspen Technology vs. SSC Technologies Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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