Correlation Between Dillards and Aeon Co
Can any of the company-specific risk be diversified away by investing in both Dillards and Aeon Co 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 Dillards and Aeon Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards and Aeon Co Ltd, you can compare the effects of market volatilities on Dillards and Aeon Co 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 Dillards with a short position of Aeon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards and Aeon Co.
Diversification Opportunities for Dillards and Aeon Co
Very good diversification
The 3 months correlation between Dillards and Aeon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dillards and Aeon Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Co and Dillards 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 Dillards are associated (or correlated) with Aeon Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Co has no effect on the direction of Dillards i.e., Dillards and Aeon Co go up and down completely randomly.
Pair Corralation between Dillards and Aeon Co
Considering the 90-day investment horizon Dillards is expected to generate 1.82 times more return on investment than Aeon Co. However, Dillards is 1.82 times more volatile than Aeon Co Ltd. It trades about 0.04 of its potential returns per unit of risk. Aeon Co Ltd is currently generating about 0.02 per unit of risk. If you would invest 32,152 in Dillards on August 23, 2024 and sell it today you would earn a total of 11,250 from holding Dillards or generate 34.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dillards vs. Aeon Co Ltd
Performance |
| Timeline |
| Dillards |
| Aeon Co |
Dillards and Aeon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dillards and Aeon Co
The main advantage of trading using opposite Dillards and Aeon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards position performs unexpectedly, Aeon Co 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 Aeon Co will offset losses from the drop in Aeon Co's long position.| Dillards vs. Macys Inc | Dillards vs. Kohls Corp | Dillards vs. Marks Spencer Group | Dillards vs. Marks and Spencer |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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