Correlation Between Viskase Companies and AAON

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

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

Diversification Opportunities for Viskase Companies and AAON

0.62

Correlation Coefficient

Viskase Companies  AAON

Poor diversification

The 3 months correlation between Viskase and AAON is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Viskase Companies and AAON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAON Inc and Viskase Companies 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 Viskase Companies are associated (or correlated) with AAON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAON Inc has no effect on the direction of Viskase Companies i.e., Viskase Companies and AAON go up and down completely randomly.

Pair Corralation between Viskase Companies and AAON

If you would invest  8,849  in AAON Inc on July 11, 2024 and sell it today you would earn a total of  2,066  from holding AAON Inc or generate 23.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Viskase Companies  vs.  AAON Inc

Viskase Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viskase Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Viskase Companies is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

AAON Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAON Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, AAON displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viskase Companies and AAON

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

The idea behind Viskase Companies and AAON Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.