Correlation Between AEON STORES and Karoon Energy
Can any of the company-specific risk be diversified away by investing in both AEON STORES and Karoon Energy 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 STORES and Karoon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON STORES and Karoon Energy, you can compare the effects of market volatilities on AEON STORES and Karoon Energy 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 STORES with a short position of Karoon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and Karoon Energy.
Diversification Opportunities for AEON STORES and Karoon Energy
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AEON and Karoon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES and Karoon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karoon Energy and AEON STORES 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 STORES are associated (or correlated) with Karoon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karoon Energy has no effect on the direction of AEON STORES i.e., AEON STORES and Karoon Energy go up and down completely randomly.
Pair Corralation between AEON STORES and Karoon Energy
If you would invest 82.00 in Karoon Energy on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Karoon Energy or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AEON STORES vs. Karoon Energy
Performance |
| Timeline |
| AEON STORES |
| Karoon Energy |
AEON STORES and Karoon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON STORES and Karoon Energy
The main advantage of trading using opposite AEON STORES and Karoon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES position performs unexpectedly, Karoon Energy 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 Karoon Energy will offset losses from the drop in Karoon Energy's long position.| AEON STORES vs. TOTAL GABON | AEON STORES vs. Walgreens Boots Alliance | AEON STORES vs. Peak Resources Limited |
| Karoon Energy vs. GALENA MINING LTD | Karoon Energy vs. OFFICE DEPOT | Karoon Energy vs. PKSHA TECHNOLOGY INC | Karoon Energy vs. MTI WIRELESS EDGE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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