Correlation Between Aeon Credit and Hengyuan Refining
Can any of the company-specific risk be diversified away by investing in both Aeon Credit and Hengyuan Refining 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 Aeon Credit and Hengyuan Refining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Credit Service and Hengyuan Refining, you can compare the effects of market volatilities on Aeon Credit and Hengyuan Refining 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 Aeon Credit with a short position of Hengyuan Refining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Credit and Hengyuan Refining.
Diversification Opportunities for Aeon Credit and Hengyuan Refining
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aeon and Hengyuan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Credit Service and Hengyuan Refining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengyuan Refining and Aeon Credit 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 Aeon Credit Service are associated (or correlated) with Hengyuan Refining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengyuan Refining has no effect on the direction of Aeon Credit i.e., Aeon Credit and Hengyuan Refining go up and down completely randomly.
Pair Corralation between Aeon Credit and Hengyuan Refining
Assuming the 90 days trading horizon Aeon Credit Service is expected to generate 0.45 times more return on investment than Hengyuan Refining. However, Aeon Credit Service is 2.21 times less risky than Hengyuan Refining. It trades about -0.16 of its potential returns per unit of risk. Hengyuan Refining is currently generating about -0.3 per unit of risk. If you would invest 700.00 in Aeon Credit Service on August 27, 2024 and sell it today you would lose (20.00) from holding Aeon Credit Service or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Credit Service vs. Hengyuan Refining
Performance |
| Timeline |
| Aeon Credit Service |
| Hengyuan Refining |
Aeon Credit and Hengyuan Refining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Credit and Hengyuan Refining
The main advantage of trading using opposite Aeon Credit and Hengyuan Refining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Credit position performs unexpectedly, Hengyuan Refining 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 Hengyuan Refining will offset losses from the drop in Hengyuan Refining's long position.| Aeon Credit vs. Digistar Bhd | Aeon Credit vs. Minetech Resources Bhd | Aeon Credit vs. OpenSys M Bhd | Aeon Credit vs. Insas Bhd |
| Hengyuan Refining vs. Ho Hup Construction | Hengyuan Refining vs. Coraza Integrated Technology | Hengyuan Refining vs. K One Technology Bhd | Hengyuan Refining vs. Greatech Technology Bhd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |