Correlation Between AlzChem Group and AEON STORES
Can any of the company-specific risk be diversified away by investing in both AlzChem Group and AEON STORES 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 AlzChem Group and AEON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlzChem Group AG and AEON STORES, you can compare the effects of market volatilities on AlzChem Group and AEON STORES 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 AlzChem Group with a short position of AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlzChem Group and AEON STORES.
Diversification Opportunities for AlzChem Group and AEON STORES
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AlzChem and AEON is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AlzChem Group AG and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES and AlzChem Group 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 AlzChem Group AG are associated (or correlated) with AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of AlzChem Group i.e., AlzChem Group and AEON STORES go up and down completely randomly.
Pair Corralation between AlzChem Group and AEON STORES
Assuming the 90 days trading horizon AlzChem Group AG is expected to generate 0.8 times more return on investment than AEON STORES. However, AlzChem Group AG is 1.24 times less risky than AEON STORES. It trades about 0.12 of its potential returns per unit of risk. AEON STORES is currently generating about -0.01 per unit of risk. If you would invest 1,668 in AlzChem Group AG on October 11, 2024 and sell it today you would earn a total of 4,412 from holding AlzChem Group AG or generate 264.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
AlzChem Group AG vs. AEON STORES
Performance |
| Timeline |
| AlzChem Group AG |
| AEON STORES |
AlzChem Group and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlzChem Group and AEON STORES
The main advantage of trading using opposite AlzChem Group and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlzChem Group position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES's long position.| AlzChem Group vs. SCANDMEDICAL SOLDK 040 | AlzChem Group vs. Highlight Communications AG | AlzChem Group vs. CVR Medical Corp | AlzChem Group vs. Cogent Communications Holdings |
| AEON STORES vs. Scottish Mortgage Investment | AEON STORES vs. British American Tobacco | AEON STORES vs. PennantPark Investment | AEON STORES vs. ALLFUNDS GROUP EO 0025 |
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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