Correlation Between Arch Resources and Aaon

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

Diversification Opportunities for Arch Resources and Aaon

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Arch Resources and Aaon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Arch Resources and Aaon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aaon Inc and Arch Resources 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 Arch Resources 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 Arch Resources i.e., Arch Resources and Aaon go up and down completely randomly.

Pair Corralation between Arch Resources and Aaon

Given the investment horizon of 90 days Arch Resources is expected to generate 1.94 times more return on investment than Aaon. However, Arch Resources is 1.94 times more volatile than Aaon Inc. It trades about 0.04 of its potential returns per unit of risk. Aaon Inc is currently generating about -0.17 per unit of risk. If you would invest  14,051  in Arch Resources on July 9, 2022 and sell it today you would earn a total of  247.00  from holding Arch Resources or generate 1.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Arch Resources  vs.  Aaon Inc

 Performance (%) 
       Timeline  
Arch Resources 
Arch Resources Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Arch Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly sluggish fundamental indicators, Arch Resources may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Arch Resources Price Channel

Aaon Inc 
Aaon Performance
0 of 100
Over the last 90 days Aaon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Aaon is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Aaon Price Channel

Arch Resources and Aaon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arch Resources and Aaon

The main advantage of trading using opposite Arch Resources and Aaon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arch Resources 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.
Arch Resources vs. Vroom Inc
The idea behind Arch Resources 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.
Aaon vs. Amazon Inc
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go