Correlation Between AEON and VIA
Can any of the company-specific risk be diversified away by investing in both AEON and VIA 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 and VIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON and VIA, you can compare the effects of market volatilities on AEON and VIA 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 with a short position of VIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON and VIA.
Diversification Opportunities for AEON and VIA
No risk reduction
The 3 months correlation between AEON and VIA is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding AEON and VIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIA and AEON 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 are associated (or correlated) with VIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIA has no effect on the direction of AEON i.e., AEON and VIA go up and down completely randomly.
Pair Corralation between AEON and VIA
Assuming the 90 days trading horizon AEON is expected to generate 2.14 times more return on investment than VIA. However, AEON is 2.14 times more volatile than VIA. It trades about 0.09 of its potential returns per unit of risk. VIA is currently generating about 0.0 per unit of risk. If you would invest 10.00 in AEON on August 23, 2024 and sell it today you would earn a total of 15.00 from holding AEON or generate 150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON vs. VIA
Performance |
| Timeline |
| AEON |
| VIA |
AEON and VIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON and VIA
The main advantage of trading using opposite AEON and VIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON position performs unexpectedly, VIA 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 VIA will offset losses from the drop in VIA's long position.The idea behind AEON and VIA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |