Correlation Between Aeon Co and Henderson Investment
Can any of the company-specific risk be diversified away by investing in both Aeon Co and Henderson Investment 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 Aeon Co and Henderson Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Co Ltd and Henderson Investment Ltd, you can compare the effects of market volatilities on Aeon Co and Henderson Investment 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 Aeon Co with a short position of Henderson Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Co and Henderson Investment.
Diversification Opportunities for Aeon Co and Henderson Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aeon and Henderson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Co Ltd and Henderson Investment Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Investment and Aeon Co 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 Aeon Co Ltd are associated (or correlated) with Henderson Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Investment has no effect on the direction of Aeon Co i.e., Aeon Co and Henderson Investment go up and down completely randomly.
Pair Corralation between Aeon Co and Henderson Investment
Assuming the 90 days horizon Aeon Co is expected to generate 21.66 times less return on investment than Henderson Investment. But when comparing it to its historical volatility, Aeon Co Ltd is 13.15 times less risky than Henderson Investment. It trades about 0.03 of its potential returns per unit of risk. Henderson Investment Ltd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Henderson Investment Ltd on September 3, 2024 and sell it today you would lose (6.00) from holding Henderson Investment Ltd or give up 35.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Co Ltd vs. Henderson Investment Ltd
Performance |
| Timeline |
| Aeon Co |
| Henderson Investment |
Aeon Co and Henderson Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Co and Henderson Investment
The main advantage of trading using opposite Aeon Co and Henderson Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Co position performs unexpectedly, Henderson Investment 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 Henderson Investment will offset losses from the drop in Henderson Investment's long position.The idea behind Aeon Co Ltd and Henderson Investment Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Henderson Investment vs. SM Investments | Henderson Investment vs. Aeon Co Ltd | Henderson Investment vs. El Puerto de | Henderson Investment vs. Tokyu Corp ADR |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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