Correlation Between AOYAMA TRADING and JERONIMO MARTINS
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and JERONIMO MARTINS 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 JERONIMO MARTINS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and JERONIMO MARTINS UNADR2, you can compare the effects of market volatilities on AOYAMA TRADING and JERONIMO MARTINS 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 JERONIMO MARTINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and JERONIMO MARTINS.
Diversification Opportunities for AOYAMA TRADING and JERONIMO MARTINS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AOYAMA and JERONIMO is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and JERONIMO MARTINS UNADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JERONIMO MARTINS UNADR2 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 JERONIMO MARTINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JERONIMO MARTINS UNADR2 has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and JERONIMO MARTINS go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and JERONIMO MARTINS
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 0.9 times more return on investment than JERONIMO MARTINS. However, AOYAMA TRADING is 1.11 times less risky than JERONIMO MARTINS. It trades about 0.08 of its potential returns per unit of risk. JERONIMO MARTINS UNADR2 is currently generating about 0.04 per unit of risk. If you would invest 1,360 in AOYAMA TRADING on September 24, 2024 and sell it today you would earn a total of 30.00 from holding AOYAMA TRADING or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AOYAMA TRADING vs. JERONIMO MARTINS UNADR2
Performance |
| Timeline |
| AOYAMA TRADING |
| JERONIMO MARTINS UNADR2 |
AOYAMA TRADING and JERONIMO MARTINS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and JERONIMO MARTINS
The main advantage of trading using opposite AOYAMA TRADING and JERONIMO MARTINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, JERONIMO MARTINS 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 JERONIMO MARTINS will offset losses from the drop in JERONIMO MARTINS's long position.| AOYAMA TRADING vs. Vishay Intertechnology | AOYAMA TRADING vs. PRECISION DRILLING P | AOYAMA TRADING vs. Wayside Technology Group | AOYAMA TRADING vs. Sunny Optical Technology |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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