Correlation Between AEON METALS and Shin Etsu

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Can any of the company-specific risk be diversified away by investing in both AEON METALS and Shin Etsu 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 METALS and Shin Etsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON METALS LTD and Shin Etsu Chemical Co, you can compare the effects of market volatilities on AEON METALS and Shin Etsu 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 METALS with a short position of Shin Etsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON METALS and Shin Etsu.

Diversification Opportunities for AEON METALS and Shin Etsu

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AEON and Shin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEON METALS LTD and Shin Etsu Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Etsu Chemical and AEON METALS 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 METALS LTD are associated (or correlated) with Shin Etsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Etsu Chemical has no effect on the direction of AEON METALS i.e., AEON METALS and Shin Etsu go up and down completely randomly.

Pair Corralation between AEON METALS and Shin Etsu

If you would invest  3,169  in Shin Etsu Chemical Co on October 31, 2024 and sell it today you would earn a total of  40.00  from holding Shin Etsu Chemical Co or generate 1.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

AEON METALS LTD  vs.  Shin Etsu Chemical Co

 Performance 
       Timeline  
AEON METALS LTD 

Risk-Adjusted Performance

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Over the last 90 days AEON METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AEON METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Shin Etsu Chemical 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shin Etsu Chemical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Shin Etsu is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AEON METALS and Shin Etsu Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AEON METALS and Shin Etsu

The main advantage of trading using opposite AEON METALS and Shin Etsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON METALS position performs unexpectedly, Shin Etsu 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 Shin Etsu will offset losses from the drop in Shin Etsu's long position.
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The idea behind AEON METALS LTD and Shin Etsu Chemical Co 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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