Correlation Between AEON MALL and ECHO INVESTMENT
Can any of the company-specific risk be diversified away by investing in both AEON MALL and ECHO INVESTMENT 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 AEON MALL and ECHO INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON MALL LTD and ECHO INVESTMENT ZY, you can compare the effects of market volatilities on AEON MALL and ECHO INVESTMENT 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 AEON MALL with a short position of ECHO INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON MALL and ECHO INVESTMENT.
Diversification Opportunities for AEON MALL and ECHO INVESTMENT
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEON and ECHO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AEON MALL LTD and ECHO INVESTMENT ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECHO INVESTMENT ZY and AEON MALL 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 AEON MALL LTD are associated (or correlated) with ECHO INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECHO INVESTMENT ZY has no effect on the direction of AEON MALL i.e., AEON MALL and ECHO INVESTMENT go up and down completely randomly.
Pair Corralation between AEON MALL and ECHO INVESTMENT
Assuming the 90 days horizon AEON MALL is expected to generate 4.3 times less return on investment than ECHO INVESTMENT. But when comparing it to its historical volatility, AEON MALL LTD is 1.57 times less risky than ECHO INVESTMENT. It trades about 0.04 of its potential returns per unit of risk. ECHO INVESTMENT ZY is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 101.00 in ECHO INVESTMENT ZY on September 24, 2024 and sell it today you would earn a total of 4.00 from holding ECHO INVESTMENT ZY or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON MALL LTD vs. ECHO INVESTMENT ZY
Performance |
| Timeline |
| AEON MALL LTD |
| ECHO INVESTMENT ZY |
AEON MALL and ECHO INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON MALL and ECHO INVESTMENT
The main advantage of trading using opposite AEON MALL and ECHO INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON MALL position performs unexpectedly, ECHO INVESTMENT 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 ECHO INVESTMENT will offset losses from the drop in ECHO INVESTMENT's long position.| AEON MALL vs. NEW WORLD DEVCO | AEON MALL vs. OPEN HOUSE GROUP | AEON MALL vs. Hufvudstaden AB | AEON MALL vs. FRASERS PROPERTY |
| ECHO INVESTMENT vs. NEW WORLD DEVCO | ECHO INVESTMENT vs. OPEN HOUSE GROUP | ECHO INVESTMENT vs. AEON MALL LTD | ECHO INVESTMENT vs. Hufvudstaden AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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