Correlation Between Ajinomoto and LeanLife Health
Can any of the company-specific risk be diversified away by investing in both Ajinomoto and LeanLife Health 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 LeanLife Health 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 LeanLife Health, you can compare the effects of market volatilities on Ajinomoto and LeanLife Health 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 LeanLife Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ajinomoto and LeanLife Health.
Diversification Opportunities for Ajinomoto and LeanLife Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ajinomoto and LeanLife is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ajinomoto Co ADR and LeanLife Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeanLife Health 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 LeanLife Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeanLife Health has no effect on the direction of Ajinomoto i.e., Ajinomoto and LeanLife Health go up and down completely randomly.
Pair Corralation between Ajinomoto and LeanLife Health
Assuming the 90 days horizon Ajinomoto is expected to generate 3.57 times less return on investment than LeanLife Health. But when comparing it to its historical volatility, Ajinomoto Co ADR is 4.77 times less risky than LeanLife Health. It trades about 0.03 of its potential returns per unit of risk. LeanLife Health is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 0.96 in LeanLife Health on December 7, 2024 and sell it today you would lose (0.46) from holding LeanLife Health or give up 47.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ajinomoto Co ADR vs. LeanLife Health
Performance |
| Timeline |
| Ajinomoto Co ADR |
| LeanLife Health |
Ajinomoto and LeanLife Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ajinomoto and LeanLife Health
The main advantage of trading using opposite Ajinomoto and LeanLife Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ajinomoto position performs unexpectedly, LeanLife Health 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 LeanLife Health will offset losses from the drop in LeanLife Health's long position.| Ajinomoto vs. Artisan Consumer Goods | ||
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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