Correlation Between Neinor Homes and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and Aozora Bank 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 Neinor Homes and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and Aozora Bank, you can compare the effects of market volatilities on Neinor Homes and Aozora Bank 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 Neinor Homes with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Aozora Bank.
Diversification Opportunities for Neinor Homes and Aozora Bank
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Neinor and Aozora is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of Neinor Homes i.e., Neinor Homes and Aozora Bank go up and down completely randomly.
Pair Corralation between Neinor Homes and Aozora Bank
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 0.99 times more return on investment than Aozora Bank. However, Neinor Homes SA is 1.01 times less risky than Aozora Bank. It trades about 0.03 of its potential returns per unit of risk. Aozora Bank is currently generating about -0.12 per unit of risk. If you would invest 1,602 in Neinor Homes SA on October 21, 2024 and sell it today you would earn a total of 10.00 from holding Neinor Homes SA or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. Aozora Bank
Performance |
| Timeline |
| Neinor Homes SA |
| Aozora Bank |
Neinor Homes and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and Aozora Bank
The main advantage of trading using opposite Neinor Homes and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| Neinor Homes vs. Easy Software AG | Neinor Homes vs. Uber Technologies | Neinor Homes vs. Nucletron Electronic Aktiengesellschaft | Neinor Homes vs. GLG LIFE TECH |
| Aozora Bank vs. Neinor Homes SA | Aozora Bank vs. KENEDIX OFFICE INV | Aozora Bank vs. alstria office REIT AG | Aozora Bank vs. ADDUS HOMECARE |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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