Correlation Between Aspen Technology and PIONEER FLEXIBLE

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

Diversification Opportunities for Aspen Technology and PIONEER FLEXIBLE

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Aspen and PIONEER is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Technology and PIONEER FLEXIBLE OPPORTUNITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIONEER FLEXIBLE OPP and Aspen Technology 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 Aspen Technology are associated (or correlated) with PIONEER FLEXIBLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIONEER FLEXIBLE OPP has no effect on the direction of Aspen Technology i.e., Aspen Technology and PIONEER FLEXIBLE go up and down completely randomly.

Pair Corralation between Aspen Technology and PIONEER FLEXIBLE

Given the investment horizon of 90 days Aspen Technology is expected to generate 1.38 times less return on investment than PIONEER FLEXIBLE. In addition to that, Aspen Technology is 4.84 times more volatile than PIONEER FLEXIBLE OPPORTUNITIES. It trades about 0.02 of its total potential returns per unit of risk. PIONEER FLEXIBLE OPPORTUNITIES is currently generating about 0.15 per unit of volatility. If you would invest  1,124  in PIONEER FLEXIBLE OPPORTUNITIES on September 10, 2022 and sell it today you would earn a total of  25.00  from holding PIONEER FLEXIBLE OPPORTUNITIES or generate 2.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Aspen Technology  vs.  PIONEER FLEXIBLE OPPORTUNITIES

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

Aspen Price Channel

PIONEER FLEXIBLE OPP 
PIONEER Performance
0 of 100
Over the last 90 days PIONEER FLEXIBLE OPPORTUNITIES has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, PIONEER FLEXIBLE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

PIONEER Price Channel

Aspen Technology and PIONEER FLEXIBLE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aspen Technology and PIONEER FLEXIBLE

The main advantage of trading using opposite Aspen Technology and PIONEER FLEXIBLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Technology position performs unexpectedly, PIONEER FLEXIBLE 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 PIONEER FLEXIBLE will offset losses from the drop in PIONEER FLEXIBLE's long position.
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The idea behind Aspen Technology and PIONEER FLEXIBLE OPPORTUNITIES 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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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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