Correlation Between Associated Capital and Aon PLC
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Aon PLC 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 Associated Capital and Aon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Aon PLC, you can compare the effects of market volatilities on Associated Capital and Aon PLC 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 Associated Capital with a short position of Aon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Aon PLC.
Diversification Opportunities for Associated Capital and Aon PLC
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Aon is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Aon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aon PLC and Associated Capital 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 Associated Capital Group are associated (or correlated) with Aon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aon PLC has no effect on the direction of Associated Capital i.e., Associated Capital and Aon PLC go up and down completely randomly.
Pair Corralation between Associated Capital and Aon PLC
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 0.4 times more return on investment than Aon PLC. However, Associated Capital Group is 2.47 times less risky than Aon PLC. It trades about -0.02 of its potential returns per unit of risk. Aon PLC is currently generating about -0.38 per unit of risk. If you would invest 3,243 in Associated Capital Group on January 30, 2024 and sell it today you would lose (10.00) from holding Associated Capital Group or give up 0.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Associated Capital Group vs. Aon PLC
Performance |
Timeline |
Associated Capital |
Aon PLC |
Associated Capital and Aon PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Associated Capital and Aon PLC
The main advantage of trading using opposite Associated Capital and Aon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Aon PLC 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 Aon PLC will offset losses from the drop in Aon PLC's long position.Associated Capital vs. Pimco Corporate Income | Associated Capital vs. Pimco Income Strategy | Associated Capital vs. Pcm Fund | Associated Capital vs. Pimco High Income |
Aon PLC vs. Willis Towers Watson | Aon PLC vs. Erie Indemnity | Aon PLC vs. CorVel Corp | Aon PLC vs. Brown Brown |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Stocks Directory Find actively traded stocks across global markets |