Correlation Between Aeorema Communications and OneSavings Bank
Can any of the company-specific risk be diversified away by investing in both Aeorema Communications and OneSavings Bank 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 Aeorema Communications and OneSavings Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeorema Communications Plc and OneSavings Bank PLC, you can compare the effects of market volatilities on Aeorema Communications and OneSavings Bank 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 Aeorema Communications with a short position of OneSavings Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeorema Communications and OneSavings Bank.
Diversification Opportunities for Aeorema Communications and OneSavings Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aeorema and OneSavings is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aeorema Communications Plc and OneSavings Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSavings Bank PLC and Aeorema Communications 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 Aeorema Communications Plc are associated (or correlated) with OneSavings Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSavings Bank PLC has no effect on the direction of Aeorema Communications i.e., Aeorema Communications and OneSavings Bank go up and down completely randomly.
Pair Corralation between Aeorema Communications and OneSavings Bank
Assuming the 90 days trading horizon Aeorema Communications Plc is expected to generate 0.5 times more return on investment than OneSavings Bank. However, Aeorema Communications Plc is 2.01 times less risky than OneSavings Bank. It trades about -0.05 of its potential returns per unit of risk. OneSavings Bank PLC is currently generating about -0.03 per unit of risk. If you would invest 5,950 in Aeorema Communications Plc on September 1, 2024 and sell it today you would lose (500.00) from holding Aeorema Communications Plc or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Aeorema Communications Plc vs. OneSavings Bank PLC
Performance |
| Timeline |
| Aeorema Communications |
| OneSavings Bank PLC |
Aeorema Communications and OneSavings Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeorema Communications and OneSavings Bank
The main advantage of trading using opposite Aeorema Communications and OneSavings Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeorema Communications position performs unexpectedly, OneSavings Bank 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 OneSavings Bank will offset losses from the drop in OneSavings Bank's long position.| Aeorema Communications vs. Samsung Electronics Co | Aeorema Communications vs. Samsung Electronics Co | Aeorema Communications vs. Hyundai Motor | Aeorema Communications vs. Toyota Motor Corp |
| OneSavings Bank vs. Atalaya Mining | OneSavings Bank vs. Endeavour Mining Corp | OneSavings Bank vs. iShares Physical Silver | OneSavings Bank vs. Eastinco Mining Exploration |
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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