Correlation Between AOYAMA TRADING and US FOODS
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and US FOODS 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 US FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and US FOODS HOLDING, you can compare the effects of market volatilities on AOYAMA TRADING and US FOODS 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 US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and US FOODS.
Diversification Opportunities for AOYAMA TRADING and US FOODS
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AOYAMA and UFH is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING 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 US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and US FOODS go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and US FOODS
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 2.94 times more return on investment than US FOODS. However, AOYAMA TRADING is 2.94 times more volatile than US FOODS HOLDING. It trades about 0.08 of its potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.1 per unit of risk. If you would invest 319.00 in AOYAMA TRADING on September 13, 2024 and sell it today you would earn a total of 1,071 from holding AOYAMA TRADING or generate 335.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
AOYAMA TRADING vs. US FOODS HOLDING
Performance |
| Timeline |
| AOYAMA TRADING |
| US FOODS HOLDING |
AOYAMA TRADING and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and US FOODS
The main advantage of trading using opposite AOYAMA TRADING and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, US FOODS 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 US FOODS will offset losses from the drop in US FOODS'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 |
| US FOODS vs. T MOBILE US | US FOODS vs. Gamma Communications plc | US FOODS vs. AOYAMA TRADING | US FOODS vs. Tower One Wireless |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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