Correlation Between Ajinomoto and Elamex SA
Can any of the company-specific risk be diversified away by investing in both Ajinomoto and Elamex SA 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 Elamex SA 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 Elamex SA de, you can compare the effects of market volatilities on Ajinomoto and Elamex SA 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 Elamex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ajinomoto and Elamex SA.
Diversification Opportunities for Ajinomoto and Elamex SA
Pay attention - limited upside
The 3 months correlation between Ajinomoto and Elamex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ajinomoto Co ADR and Elamex SA de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elamex SA de 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 Elamex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elamex SA de has no effect on the direction of Ajinomoto i.e., Ajinomoto and Elamex SA go up and down completely randomly.
Pair Corralation between Ajinomoto and Elamex SA
Assuming the 90 days horizon Ajinomoto Co ADR is expected to generate 6.27 times more return on investment than Elamex SA. However, Ajinomoto is 6.27 times more volatile than Elamex SA de. It trades about 0.02 of its potential returns per unit of risk. Elamex SA de is currently generating about 0.07 per unit of risk. If you would invest 4,026 in Ajinomoto Co ADR on September 1, 2024 and sell it today you would earn a total of 194.00 from holding Ajinomoto Co ADR or generate 4.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 99.73% |
Values | Daily Returns |
Ajinomoto Co ADR vs. Elamex SA de
Performance |
Timeline |
Ajinomoto Co ADR |
Elamex SA de |
Ajinomoto and Elamex SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ajinomoto and Elamex SA
The main advantage of trading using opposite Ajinomoto and Elamex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ajinomoto position performs unexpectedly, Elamex SA 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 Elamex SA will offset losses from the drop in Elamex SA's 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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