Correlation Between Aozora Bank and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Aozora Bank and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and IMPERIAL TOBACCO.
Diversification Opportunities for Aozora Bank and IMPERIAL TOBACCO
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aozora and IMPERIAL is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Aozora Bank i.e., Aozora Bank and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Aozora Bank and IMPERIAL TOBACCO
Assuming the 90 days horizon Aozora Bank is expected to under-perform the IMPERIAL TOBACCO. In addition to that, Aozora Bank is 1.52 times more volatile than IMPERIAL TOBACCO . It trades about -0.02 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.23 per unit of volatility. If you would invest 2,613 in IMPERIAL TOBACCO on September 12, 2024 and sell it today you would earn a total of 494.00 from holding IMPERIAL TOBACCO or generate 18.91% 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. IMPERIAL TOBACCO
Performance |
| Timeline |
| Aozora Bank |
| IMPERIAL TOBACCO |
Aozora Bank and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and IMPERIAL TOBACCO
The main advantage of trading using opposite Aozora Bank and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO'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 |
| IMPERIAL TOBACCO vs. SLR Investment Corp | IMPERIAL TOBACCO vs. CyberArk Software | IMPERIAL TOBACCO vs. PennantPark Investment | IMPERIAL TOBACCO vs. ECHO INVESTMENT ZY |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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