Correlation Between CHRYSALIS INVESTMENTS and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both CHRYSALIS INVESTMENTS and AOYAMA TRADING 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 CHRYSALIS INVESTMENTS and AOYAMA TRADING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHRYSALIS INVESTMENTS LTD and AOYAMA TRADING, you can compare the effects of market volatilities on CHRYSALIS INVESTMENTS and AOYAMA TRADING 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 CHRYSALIS INVESTMENTS with a short position of AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRYSALIS INVESTMENTS and AOYAMA TRADING.
Diversification Opportunities for CHRYSALIS INVESTMENTS and AOYAMA TRADING
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CHRYSALIS and AOYAMA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CHRYSALIS INVESTMENTS LTD and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING and CHRYSALIS INVESTMENTS 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 CHRYSALIS INVESTMENTS LTD are associated (or correlated) with AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of CHRYSALIS INVESTMENTS i.e., CHRYSALIS INVESTMENTS and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between CHRYSALIS INVESTMENTS and AOYAMA TRADING
Assuming the 90 days horizon CHRYSALIS INVESTMENTS is expected to generate 4.37 times less return on investment than AOYAMA TRADING. But when comparing it to its historical volatility, CHRYSALIS INVESTMENTS LTD is 1.65 times less risky than AOYAMA TRADING. It trades about 0.03 of its potential returns per unit of risk. AOYAMA TRADING is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 309.00 in AOYAMA TRADING on October 11, 2024 and sell it today you would earn a total of 1,031 from holding AOYAMA TRADING or generate 333.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
CHRYSALIS INVESTMENTS LTD vs. AOYAMA TRADING
Performance |
| Timeline |
| CHRYSALIS INVESTMENTS LTD |
| AOYAMA TRADING |
CHRYSALIS INVESTMENTS and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHRYSALIS INVESTMENTS and AOYAMA TRADING
The main advantage of trading using opposite CHRYSALIS INVESTMENTS and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHRYSALIS INVESTMENTS position performs unexpectedly, AOYAMA TRADING 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 AOYAMA TRADING will offset losses from the drop in AOYAMA TRADING's long position.| CHRYSALIS INVESTMENTS vs. United Insurance Holdings | CHRYSALIS INVESTMENTS vs. PNC Financial Services | CHRYSALIS INVESTMENTS vs. REVO INSURANCE SPA | CHRYSALIS INVESTMENTS vs. Cleanaway Waste Management |
| AOYAMA TRADING vs. MOLSON RS BEVERAGE | AOYAMA TRADING vs. WT OFFSHORE | AOYAMA TRADING vs. Molson Coors Beverage | AOYAMA TRADING vs. China Resources Beer |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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