Correlation Between ALLFUNDS GROUP and AEON STORES
Can any of the company-specific risk be diversified away by investing in both ALLFUNDS GROUP and AEON STORES 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 ALLFUNDS GROUP and AEON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALLFUNDS GROUP EO 0025 and AEON STORES, you can compare the effects of market volatilities on ALLFUNDS GROUP and AEON STORES 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 ALLFUNDS GROUP with a short position of AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLFUNDS GROUP and AEON STORES.
Diversification Opportunities for ALLFUNDS GROUP and AEON STORES
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALLFUNDS and AEON is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ALLFUNDS GROUP EO 0025 and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES and ALLFUNDS GROUP 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 ALLFUNDS GROUP EO 0025 are associated (or correlated) with AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of ALLFUNDS GROUP i.e., ALLFUNDS GROUP and AEON STORES go up and down completely randomly.
Pair Corralation between ALLFUNDS GROUP and AEON STORES
Assuming the 90 days horizon ALLFUNDS GROUP EO 0025 is expected to generate 2.26 times more return on investment than AEON STORES. However, ALLFUNDS GROUP is 2.26 times more volatile than AEON STORES. It trades about -0.04 of its potential returns per unit of risk. AEON STORES is currently generating about -0.09 per unit of risk. If you would invest 641.00 in ALLFUNDS GROUP EO 0025 on October 26, 2024 and sell it today you would lose (144.00) from holding ALLFUNDS GROUP EO 0025 or give up 22.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALLFUNDS GROUP EO 0025 vs. AEON STORES
Performance |
| Timeline |
| ALLFUNDS GROUP EO |
| AEON STORES |
ALLFUNDS GROUP and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALLFUNDS GROUP and AEON STORES
The main advantage of trading using opposite ALLFUNDS GROUP and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLFUNDS GROUP position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES's long position.| ALLFUNDS GROUP vs. PennantPark Investment | ALLFUNDS GROUP vs. Materialise NV | ALLFUNDS GROUP vs. Vulcan Materials | ALLFUNDS GROUP vs. Martin Marietta Materials |
| AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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