Correlation Between AEON MALL and Granite Construction
Can any of the company-specific risk be diversified away by investing in both AEON MALL and Granite Construction 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 Granite Construction 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 Granite Construction, you can compare the effects of market volatilities on AEON MALL and Granite Construction 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 Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON MALL and Granite Construction.
Diversification Opportunities for AEON MALL and Granite Construction
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEON and Granite is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding AEON MALL LTD and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction 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 Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of AEON MALL i.e., AEON MALL and Granite Construction go up and down completely randomly.
Pair Corralation between AEON MALL and Granite Construction
Assuming the 90 days horizon AEON MALL LTD is expected to generate 1.13 times more return on investment than Granite Construction. However, AEON MALL is 1.13 times more volatile than Granite Construction. It trades about 0.06 of its potential returns per unit of risk. Granite Construction is currently generating about 0.05 per unit of risk. If you would invest 1,210 in AEON MALL LTD on September 13, 2024 and sell it today you would earn a total of 20.00 from holding AEON MALL LTD or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON MALL LTD vs. Granite Construction
Performance |
| Timeline |
| AEON MALL LTD |
| Granite Construction |
AEON MALL and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON MALL and Granite Construction
The main advantage of trading using opposite AEON MALL and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON MALL position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| AEON MALL vs. Shenandoah Telecommunications | AEON MALL vs. REGAL ASIAN INVESTMENTS | AEON MALL vs. Consolidated Communications Holdings | AEON MALL vs. Mobilezone Holding AG |
| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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