Correlation Between AOYAMA TRADING and Identiv
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and Identiv 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 Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and Identiv, you can compare the effects of market volatilities on AOYAMA TRADING and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and Identiv.
Diversification Opportunities for AOYAMA TRADING and Identiv
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AOYAMA and Identiv is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and Identiv go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and Identiv
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 2.48 times more return on investment than Identiv. However, AOYAMA TRADING is 2.48 times more volatile than Identiv. It trades about 0.37 of its potential returns per unit of risk. Identiv is currently generating about 0.23 per unit of risk. If you would invest 780.00 in AOYAMA TRADING on August 28, 2024 and sell it today you would earn a total of 570.00 from holding AOYAMA TRADING or generate 73.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. Identiv
Performance |
| Timeline |
| AOYAMA TRADING |
| Identiv |
AOYAMA TRADING and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and Identiv
The main advantage of trading using opposite AOYAMA TRADING and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| AOYAMA TRADING vs. Magnachip Semiconductor | AOYAMA TRADING vs. Grupo Carso SAB | AOYAMA TRADING vs. SIEM OFFSHORE NEW | AOYAMA TRADING vs. ELMOS SEMICONDUCTOR |
| Identiv vs. Superior Plus Corp | Identiv vs. Origin Agritech | Identiv vs. INTUITIVE SURGICAL | Identiv vs. Volkswagen AG |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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