Correlation Between Aozora Bank and Mid Southern
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Mid Southern 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 Mid Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and Mid Southern Bancorp, you can compare the effects of market volatilities on Aozora Bank and Mid Southern 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 Mid Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Mid Southern.
Diversification Opportunities for Aozora Bank and Mid Southern
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aozora and Mid is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and Mid Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Southern Bancorp 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 Mid Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Southern Bancorp has no effect on the direction of Aozora Bank i.e., Aozora Bank and Mid Southern go up and down completely randomly.
Pair Corralation between Aozora Bank and Mid Southern
If you would invest 1,297 in Mid Southern Bancorp on October 30, 2024 and sell it today you would lose (27.00) from holding Mid Southern Bancorp or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 3.51% |
| Values | Daily Returns |
Aozora Bank vs. Mid Southern Bancorp
Performance |
| Timeline |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Mid Southern Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aozora Bank and Mid Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Mid Southern
The main advantage of trading using opposite Aozora Bank and Mid Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Mid Southern 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 Mid Southern will offset losses from the drop in Mid Southern's long position.| Aozora Bank vs. Hurco Companies | Aozora Bank vs. Inflection Point Acquisition | Aozora Bank vs. Perseus Mining Limited | Aozora Bank vs. EastGroup Properties |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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