Correlation Between Ajinomoto and ANA Holdings
Can any of the company-specific risk be diversified away by investing in both Ajinomoto and ANA Holdings 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 Ajinomoto and ANA Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ajinomoto Co ADR and ANA Holdings ADR, you can compare the effects of market volatilities on Ajinomoto and ANA Holdings 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 Ajinomoto with a short position of ANA Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ajinomoto and ANA Holdings.
Diversification Opportunities for Ajinomoto and ANA Holdings
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ajinomoto and ANA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ajinomoto Co ADR and ANA Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANA Holdings ADR and Ajinomoto 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 Ajinomoto Co ADR are associated (or correlated) with ANA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANA Holdings ADR has no effect on the direction of Ajinomoto i.e., Ajinomoto and ANA Holdings go up and down completely randomly.
Pair Corralation between Ajinomoto and ANA Holdings
Assuming the 90 days horizon Ajinomoto Co ADR is expected to generate 0.35 times more return on investment than ANA Holdings. However, Ajinomoto Co ADR is 2.9 times less risky than ANA Holdings. It trades about 0.2 of its potential returns per unit of risk. ANA Holdings ADR is currently generating about 0.02 per unit of risk. If you would invest 3,913 in Ajinomoto Co ADR on December 25, 2024 and sell it today you would earn a total of 180.00 from holding Ajinomoto Co ADR or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ajinomoto Co ADR vs. ANA Holdings ADR
Performance |
| Timeline |
| Ajinomoto Co ADR |
| ANA Holdings ADR |
Ajinomoto and ANA Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ajinomoto and ANA Holdings
The main advantage of trading using opposite Ajinomoto and ANA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ajinomoto position performs unexpectedly, ANA Holdings 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 ANA Holdings will offset losses from the drop in ANA Holdings' long position.| Ajinomoto vs. Artisan Consumer Goods | Ajinomoto vs. Altavoz Entertainment | Ajinomoto vs. Avi Ltd ADR | Ajinomoto vs. The a2 Milk |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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