Correlation Between FFW and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both FFW and Aozora Bank 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 FFW and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FFW Corporation and Aozora Bank, you can compare the effects of market volatilities on FFW and Aozora Bank 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 FFW with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FFW and Aozora Bank.
Diversification Opportunities for FFW and Aozora Bank
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between FFW and Aozora is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding FFW Corp. and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and FFW 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 FFW Corporation are associated (or correlated) with Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of FFW i.e., FFW and Aozora Bank go up and down completely randomly.
Pair Corralation between FFW and Aozora Bank
If you would invest 3,442 in FFW Corporation on September 3, 2024 and sell it today you would earn a total of 508.00 from holding FFW Corporation or generate 14.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.83% |
| Values | Daily Returns |
FFW Corp. vs. Aozora Bank
Performance |
| Timeline |
| FFW Corporation |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FFW and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FFW and Aozora Bank
The main advantage of trading using opposite FFW and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FFW position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| FFW vs. Western Asset Global | FFW vs. Invesco Trust For | FFW vs. Logan Ridge Finance | FFW vs. Invesco Advantage MIT |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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