Correlation Between Aramark Holdings and Embraer SA
Can any of the company-specific risk be diversified away by investing in both Aramark Holdings and Embraer SA 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 Embraer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aramark Holdings and Embraer SA ADR, you can compare the effects of market volatilities on Aramark Holdings and Embraer SA 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 Embraer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aramark Holdings and Embraer SA.
Diversification Opportunities for Aramark Holdings and Embraer SA
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aramark and Embraer is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aramark Holdings and Embraer SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embraer SA ADR 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 Embraer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embraer SA ADR has no effect on the direction of Aramark Holdings i.e., Aramark Holdings and Embraer SA go up and down completely randomly.
Pair Corralation between Aramark Holdings and Embraer SA
Given the investment horizon of 90 days Aramark Holdings is expected to under-perform the Embraer SA. But the stock apears to be less risky and, when comparing its historical volatility, Aramark Holdings is 1.77 times less risky than Embraer SA. The stock trades about -0.02 of its potential returns per unit of risk. The Embraer SA ADR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,786 in Embraer SA ADR on August 16, 2025 and sell it today you would earn a total of 662.00 from holding Embraer SA ADR or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.3% |
| Values | Daily Returns |
Aramark Holdings vs. Embraer SA ADR
Performance |
| Timeline |
| Aramark Holdings |
| Embraer SA ADR |
Risk-Adjusted Performance
Fair
Weak | Strong |
Aramark Holdings and Embraer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aramark Holdings and Embraer SA
The main advantage of trading using opposite Aramark Holdings and Embraer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aramark Holdings position performs unexpectedly, Embraer SA 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 Embraer SA will offset losses from the drop in Embraer SA's long position.| Aramark Holdings vs. Donaldson | Aramark Holdings vs. Core Main | Aramark Holdings vs. Pool Corporation | Aramark Holdings vs. Applied Industrial Technologies |
| Embraer SA vs. Huntington Ingalls Industries | Embraer SA vs. Leonardo DRS, Common | Embraer SA vs. Textron | Embraer SA vs. Topbuild Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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