Correlation Between Aozora Bank and Euronext
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Euronext 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 Euronext into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and Euronext NV, you can compare the effects of market volatilities on Aozora Bank and Euronext 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 Euronext. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Euronext.
Diversification Opportunities for Aozora Bank and Euronext
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aozora and Euronext is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and Euronext NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronext NV 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 Euronext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronext NV has no effect on the direction of Aozora Bank i.e., Aozora Bank and Euronext go up and down completely randomly.
Pair Corralation between Aozora Bank and Euronext
Assuming the 90 days horizon Aozora Bank is expected to under-perform the Euronext. In addition to that, Aozora Bank is 1.61 times more volatile than Euronext NV. It trades about -0.01 of its total potential returns per unit of risk. Euronext NV is currently generating about 0.08 per unit of volatility. If you would invest 6,584 in Euronext NV on September 14, 2024 and sell it today you would earn a total of 4,066 from holding Euronext NV or generate 61.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank vs. Euronext NV
Performance |
| Timeline |
| Aozora Bank |
| Euronext NV |
Aozora Bank and Euronext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Euronext
The main advantage of trading using opposite Aozora Bank and Euronext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Euronext 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 Euronext will offset losses from the drop in Euronext'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 |
| Euronext vs. CME Group | Euronext vs. Intercontinental Exchange | Euronext vs. Hong Kong Exchanges | Euronext vs. London Stock Exchange |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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