Correlation Between AES and Middleby Corp

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

By analyzing existing cross correlation between The AES and Middleby Corp, you can compare the effects of market volatilities on AES and Middleby Corp 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 AES with a short position of Middleby Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Middleby Corp.

Diversification Opportunities for AES and Middleby Corp

-0.06

Correlation Coefficient

AES  Middleby Corp

Good diversification

The 3 months correlation between AES and Middleby is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding The AES and Middleby Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middleby Corp and AES 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 The AES are associated (or correlated) with Middleby Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middleby Corp has no effect on the direction of AES i.e., AES and Middleby Corp go up and down completely randomly.

Pair Corralation between AES and Middleby Corp

Considering the 90-day investment horizon The AES is expected to generate 1.4 times more return on investment than Middleby Corp. However, AES is 1.4 times more volatile than Middleby Corp. It trades about 0.06 of its potential returns per unit of risk. Middleby Corp is currently generating about -0.1 per unit of risk. If you would invest  1,171  in The AES on May 11, 2025 and sell it today you would earn a total of  114.00  from holding The AES or generate 9.74% return on investment over 90 days.

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

The AES  vs.  Middleby Corp

AES

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, AES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Middleby Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Middleby Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with AES and Middleby Corp

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

The idea behind The AES and Middleby Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.