Correlation Between Aozora Bank and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Koninklijke Ahold 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 Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Aozora Bank and Koninklijke Ahold 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 Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Koninklijke Ahold.
Diversification Opportunities for Aozora Bank and Koninklijke Ahold
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aozora and Koninklijke is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold 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 Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Aozora Bank i.e., Aozora Bank and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Aozora Bank and Koninklijke Ahold
Assuming the 90 days horizon Aozora Bank is expected to under-perform the Koninklijke Ahold. In addition to that, Aozora Bank is 1.94 times more volatile than Koninklijke Ahold Delhaize. It trades about -0.01 of its total potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.04 per unit of volatility. If you would invest 2,597 in Koninklijke Ahold Delhaize on September 14, 2024 and sell it today you would earn a total of 617.00 from holding Koninklijke Ahold Delhaize or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Aozora Bank |
| Koninklijke Ahold |
Aozora Bank and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Koninklijke Ahold
The main advantage of trading using opposite Aozora Bank and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Aozora Bank vs. Mitsui Chemicals | Aozora Bank vs. FLOW TRADERS LTD | Aozora Bank vs. MCEWEN MINING INC | Aozora Bank vs. MARKET VECTR RETAIL |
| Koninklijke Ahold vs. Apollo Investment Corp | Koninklijke Ahold vs. Aozora Bank | Koninklijke Ahold vs. Gladstone Investment | Koninklijke Ahold vs. Virtus Investment Partners |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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