Correlation Between AOYAMA TRADING and NIKKON HOLDINGS
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and NIKKON HOLDINGS 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 AOYAMA TRADING and NIKKON HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and NIKKON HOLDINGS TD, you can compare the effects of market volatilities on AOYAMA TRADING and NIKKON HOLDINGS 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 AOYAMA TRADING with a short position of NIKKON HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and NIKKON HOLDINGS.
Diversification Opportunities for AOYAMA TRADING and NIKKON HOLDINGS
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AOYAMA and NIKKON is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and NIKKON HOLDINGS TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKKON HOLDINGS TD and AOYAMA TRADING 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 AOYAMA TRADING are associated (or correlated) with NIKKON HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKKON HOLDINGS TD has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and NIKKON HOLDINGS go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and NIKKON HOLDINGS
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 2.37 times more return on investment than NIKKON HOLDINGS. However, AOYAMA TRADING is 2.37 times more volatile than NIKKON HOLDINGS TD. It trades about 0.42 of its potential returns per unit of risk. NIKKON HOLDINGS TD is currently generating about 0.27 per unit of risk. If you would invest 1,090 in AOYAMA TRADING on September 14, 2024 and sell it today you would earn a total of 300.00 from holding AOYAMA TRADING or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. NIKKON HOLDINGS TD
Performance |
| Timeline |
| AOYAMA TRADING |
| NIKKON HOLDINGS TD |
AOYAMA TRADING and NIKKON HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and NIKKON HOLDINGS
The main advantage of trading using opposite AOYAMA TRADING and NIKKON HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, NIKKON HOLDINGS 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 NIKKON HOLDINGS will offset losses from the drop in NIKKON HOLDINGS's long position.| AOYAMA TRADING vs. FAST RETAIL ADR | AOYAMA TRADING vs. CCC SA | AOYAMA TRADING vs. Superior Plus Corp | AOYAMA TRADING vs. SIVERS SEMICONDUCTORS AB |
| NIKKON HOLDINGS vs. EIDESVIK OFFSHORE NK | NIKKON HOLDINGS vs. SIEM OFFSHORE NEW | NIKKON HOLDINGS vs. MOVIE GAMES SA | NIKKON HOLDINGS vs. AOYAMA TRADING |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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