Correlation Between Aeon Co and Macys
Can any of the company-specific risk be diversified away by investing in both Aeon Co and Macys 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 Macys 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 Macys Inc, you can compare the effects of market volatilities on Aeon Co and Macys 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 Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Co and Macys.
Diversification Opportunities for Aeon Co and Macys
Very good diversification
The 3 months correlation between Aeon and Macys is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Co Ltd and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc 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 Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of Aeon Co i.e., Aeon Co and Macys go up and down completely randomly.
Pair Corralation between Aeon Co and Macys
Assuming the 90 days horizon Aeon Co Ltd is expected to under-perform the Macys. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aeon Co Ltd is 2.39 times less risky than Macys. The pink sheet trades about -0.14 of its potential returns per unit of risk. The Macys Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,551 in Macys Inc on August 27, 2024 and sell it today you would earn a total of 79.00 from holding Macys Inc or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Co Ltd vs. Macys Inc
Performance |
| Timeline |
| Aeon Co |
| Macys Inc |
Aeon Co and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Co and Macys
The main advantage of trading using opposite Aeon Co and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Co position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.The idea behind Aeon Co Ltd and Macys Inc 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.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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