Correlation Between Aozora Bank and CHINA VANKE
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and CHINA VANKE 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 Aozora Bank and CHINA VANKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and CHINA VANKE TD, you can compare the effects of market volatilities on Aozora Bank and CHINA VANKE 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 Aozora Bank with a short position of CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and CHINA VANKE.
Diversification Opportunities for Aozora Bank and CHINA VANKE
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aozora and CHINA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD and Aozora Bank 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 Aozora Bank are associated (or correlated) with CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of Aozora Bank i.e., Aozora Bank and CHINA VANKE go up and down completely randomly.
Pair Corralation between Aozora Bank and CHINA VANKE
Assuming the 90 days horizon Aozora Bank is expected to under-perform the CHINA VANKE. But the stock apears to be less risky and, when comparing its historical volatility, Aozora Bank is 5.48 times less risky than CHINA VANKE. The stock trades about -0.02 of its potential returns per unit of risk. The CHINA VANKE TD is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 45.00 in CHINA VANKE TD on September 12, 2024 and sell it today you would earn a total of 36.00 from holding CHINA VANKE TD or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank vs. CHINA VANKE TD
Performance |
| Timeline |
| Aozora Bank |
| CHINA VANKE TD |
Aozora Bank and CHINA VANKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and CHINA VANKE
The main advantage of trading using opposite Aozora Bank and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, CHINA VANKE 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 CHINA VANKE will offset losses from the drop in CHINA VANKE's long position.| Aozora Bank vs. Agricultural Bank of | Aozora Bank vs. Commonwealth Bank of | Aozora Bank vs. Superior Plus Corp | Aozora Bank vs. SIVERS SEMICONDUCTORS AB |
| CHINA VANKE vs. TRAINLINE PLC LS | CHINA VANKE vs. TEXAS ROADHOUSE | CHINA VANKE vs. COPLAND ROAD CAPITAL | CHINA VANKE vs. Columbia Sportswear |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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