Correlation Between Aozora Bank and Commercial International
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Commercial International 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 Commercial International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and Commercial International Bank, you can compare the effects of market volatilities on Aozora Bank and Commercial International 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 Commercial International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Commercial International.
Diversification Opportunities for Aozora Bank and Commercial International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aozora and Commercial is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and Commercial International Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial International 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 Commercial International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial International has no effect on the direction of Aozora Bank i.e., Aozora Bank and Commercial International go up and down completely randomly.
Pair Corralation between Aozora Bank and Commercial International
If you would invest 1,989 in Aozora Bank on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Aozora Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 2.5% |
| Values | Daily Returns |
Aozora Bank vs. Commercial International Bank
Performance |
| Timeline |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Commercial International |
Aozora Bank and Commercial International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Commercial International
The main advantage of trading using opposite Aozora Bank and Commercial International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Commercial International 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 Commercial International will offset losses from the drop in Commercial International's long position.| Aozora Bank vs. Amkor Technology | Aozora Bank vs. Lindblad Expeditions Holdings | Aozora Bank vs. Norfolk Southern | Aozora Bank vs. Olympic Steel |
| Commercial International vs. Bank Mandiri Persero | Commercial International vs. Turkiye Garanti Bankasi | Commercial International vs. BOC Hong Kong | Commercial International vs. Hang Seng Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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