Correlation Between AOYAMA TRADING and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and SERI INDUSTRIAL 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 SERI INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and SERI INDUSTRIAL EO, you can compare the effects of market volatilities on AOYAMA TRADING and SERI INDUSTRIAL 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 SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and SERI INDUSTRIAL.
Diversification Opportunities for AOYAMA TRADING and SERI INDUSTRIAL
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AOYAMA and SERI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and SERI INDUSTRIAL
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 0.36 times more return on investment than SERI INDUSTRIAL. However, AOYAMA TRADING is 2.79 times less risky than SERI INDUSTRIAL. It trades about -0.13 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about -0.13 per unit of risk. If you would invest 1,360 in AOYAMA TRADING on October 29, 2024 and sell it today you would lose (40.00) from holding AOYAMA TRADING or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| AOYAMA TRADING |
| SERI INDUSTRIAL EO |
AOYAMA TRADING and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and SERI INDUSTRIAL
The main advantage of trading using opposite AOYAMA TRADING and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.The idea behind AOYAMA TRADING and SERI INDUSTRIAL EO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SERI INDUSTRIAL vs. MCEWEN MINING INC | SERI INDUSTRIAL vs. ELL ENVIRONHLDGS HD 0001 | SERI INDUSTRIAL vs. MOUNT GIBSON IRON | SERI INDUSTRIAL vs. GALENA MINING LTD |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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