Correlation Between REGAL ASIAN and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN 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 REGAL ASIAN and AOYAMA TRADING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and AOYAMA TRADING, you can compare the effects of market volatilities on REGAL ASIAN 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 REGAL ASIAN with a short position of AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and AOYAMA TRADING.
Diversification Opportunities for REGAL ASIAN and AOYAMA TRADING
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between REGAL and AOYAMA is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between REGAL ASIAN and AOYAMA TRADING
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the AOYAMA TRADING. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 5.29 times less risky than AOYAMA TRADING. The stock trades about -0.21 of its potential returns per unit of risk. The AOYAMA TRADING is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 780.00 in AOYAMA TRADING on September 1, 2024 and sell it today you would earn a total of 620.00 from holding AOYAMA TRADING or generate 79.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. AOYAMA TRADING
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| AOYAMA TRADING |
REGAL ASIAN and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and AOYAMA TRADING
The main advantage of trading using opposite REGAL ASIAN and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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.| REGAL ASIAN vs. PennantPark Investment | REGAL ASIAN vs. SEI INVESTMENTS | REGAL ASIAN vs. MARKET VECTR RETAIL | REGAL ASIAN vs. Strategic Investments AS |
| AOYAMA TRADING vs. Diamyd Medical AB | AOYAMA TRADING vs. AVITA Medical | AOYAMA TRADING vs. PennyMac Mortgage Investment | AOYAMA TRADING vs. IMAGIN MEDICAL INC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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