Correlation Between AOYAMA TRADING and CHINA SOUTHN
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and CHINA SOUTHN 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 CHINA SOUTHN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and CHINA SOUTHN AIR H , you can compare the effects of market volatilities on AOYAMA TRADING and CHINA SOUTHN 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 CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and CHINA SOUTHN.
Diversification Opportunities for AOYAMA TRADING and CHINA SOUTHN
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AOYAMA and CHINA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR 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 CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and CHINA SOUTHN go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and CHINA SOUTHN
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 0.38 times more return on investment than CHINA SOUTHN. However, AOYAMA TRADING is 2.65 times less risky than CHINA SOUTHN. It trades about 0.01 of its potential returns per unit of risk. CHINA SOUTHN AIR H is currently generating about -0.06 per unit of risk. If you would invest 1,350 in AOYAMA TRADING on November 6, 2024 and sell it today you would earn a total of 0.00 from holding AOYAMA TRADING or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. CHINA SOUTHN AIR H
Performance |
| Timeline |
| AOYAMA TRADING |
| CHINA SOUTHN AIR |
AOYAMA TRADING and CHINA SOUTHN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and CHINA SOUTHN
The main advantage of trading using opposite AOYAMA TRADING and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, CHINA SOUTHN 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 CHINA SOUTHN will offset losses from the drop in CHINA SOUTHN's long position.| AOYAMA TRADING vs. Minerals Technologies | AOYAMA TRADING vs. BioNTech SE | AOYAMA TRADING vs. SOFI TECHNOLOGIES | AOYAMA TRADING vs. Tradegate AG Wertpapierhandelsbank |
| CHINA SOUTHN vs. TreeHouse Foods | CHINA SOUTHN vs. TITANIUM TRANSPORTGROUP | CHINA SOUTHN vs. GWILLI FOOD | CHINA SOUTHN vs. INDOFOOD AGRI RES |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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