Correlation Between AOYAMA TRADING and ITV Plc
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and ITV Plc 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 ITV Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and ITV plc, you can compare the effects of market volatilities on AOYAMA TRADING and ITV Plc 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 ITV Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and ITV Plc.
Diversification Opportunities for AOYAMA TRADING and ITV Plc
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AOYAMA and ITV is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and ITV plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV plc 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 ITV Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV plc has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and ITV Plc go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and ITV Plc
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 1.75 times more return on investment than ITV Plc. However, AOYAMA TRADING is 1.75 times more volatile than ITV plc. It trades about 0.08 of its potential returns per unit of risk. ITV plc is currently generating about 0.03 per unit of risk. If you would invest 322.00 in AOYAMA TRADING on September 14, 2024 and sell it today you would earn a total of 1,068 from holding AOYAMA TRADING or generate 331.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. ITV plc
Performance |
| Timeline |
| AOYAMA TRADING |
| ITV plc |
AOYAMA TRADING and ITV Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and ITV Plc
The main advantage of trading using opposite AOYAMA TRADING and ITV Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, ITV Plc 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 ITV Plc will offset losses from the drop in ITV Plc'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 |
| ITV Plc vs. Entravision Communications | ITV Plc vs. Hemisphere Energy Corp | ITV Plc vs. National Bank Holdings | ITV Plc vs. Computer And Technologies |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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