Correlation Between AAON and Bushveld Minerals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both AAON and Bushveld Minerals 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 AAON and Bushveld Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAON Inc and Bushveld Minerals Limited, you can compare the effects of market volatilities on AAON and Bushveld Minerals 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 AAON with a short position of Bushveld Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAON and Bushveld Minerals.

Diversification Opportunities for AAON and Bushveld Minerals

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between AAON and Bushveld is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AAON Inc and Bushveld Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bushveld Minerals and AAON 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 AAON Inc are associated (or correlated) with Bushveld Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bushveld Minerals has no effect on the direction of AAON i.e., AAON and Bushveld Minerals go up and down completely randomly.

Pair Corralation between AAON and Bushveld Minerals

Given the investment horizon of 90 days AAON is expected to generate 19.99 times less return on investment than Bushveld Minerals. But when comparing it to its historical volatility, AAON Inc is 10.14 times less risky than Bushveld Minerals. It trades about 0.04 of its potential returns per unit of risk. Bushveld Minerals Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Bushveld Minerals Limited on September 4, 2022 and sell it today you would lose (16.00)  from holding Bushveld Minerals Limited or give up 69.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

AAON Inc  vs.  Bushveld Minerals Limited

 Performance (%) 
       Timeline  
AAON Inc 
AAON Performance
17 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AAON Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, AAON disclosed solid returns over the last few months and may actually be approaching a breakup point.

AAON Price Channel

Bushveld Minerals 
Bushveld Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bushveld Minerals Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Bushveld Minerals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bushveld Price Channel

AAON and Bushveld Minerals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AAON and Bushveld Minerals

The main advantage of trading using opposite AAON and Bushveld Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAON position performs unexpectedly, Bushveld Minerals 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 Bushveld Minerals will offset losses from the drop in Bushveld Minerals' long position.
AAON vs. Aspen Aerogels
AAON vs. BlueLinx Holdings
AAON vs. GMS Inc
The idea behind AAON Inc and Bushveld Minerals Limited 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.
Bushveld Minerals vs. Alcoa Corp
Bushveld Minerals vs. Dupont De Nemours
Bushveld Minerals vs. Linde PLC
Bushveld Minerals vs. Anheuser Busch Inbev
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 CEO Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go