Correlation Between Aramark Holdings and International Consolidated

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

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

Diversification Opportunities for Aramark Holdings and International Consolidated

-0.23

Correlation Coefficient

Aramark Holdings  International Consolidated

Very good diversification

The 3 months correlation between Aramark and International is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aramark Holdings and International Consolidated Com in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and Aramark Holdings 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 Aramark Holdings are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Aramark Holdings i.e., Aramark Holdings and International Consolidated go up and down completely randomly.

Pair Corralation between Aramark Holdings and International Consolidated

Given the investment horizon of 90 days Aramark Holdings is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Aramark Holdings is 139.82 times less risky than International Consolidated. The stock trades about -0.02 of its potential returns per unit of risk. The International Consolidated Companies is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  20.00  in International Consolidated Companies on September 28, 2024 and sell it today you would lose (18.40) from holding International Consolidated Companies or give up 92.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aramark Holdings  vs.  International Consolidated Com

Aramark Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

International Consolidated

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Companies are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, International Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aramark Holdings and International Consolidated

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

The idea behind Aramark Holdings and International Consolidated Companies 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.