Correlation Between Meta Financial and AOYAMA TRADING
Can any of the company-specific risk be diversified away by investing in both Meta Financial and AOYAMA TRADING 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 Meta Financial and AOYAMA TRADING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Financial Group and AOYAMA TRADING, you can compare the effects of market volatilities on Meta Financial and AOYAMA TRADING 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 Meta Financial with a short position of AOYAMA TRADING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Financial and AOYAMA TRADING.
Diversification Opportunities for Meta Financial and AOYAMA TRADING
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meta and AOYAMA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Meta Financial Group and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING and Meta Financial 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 Meta Financial Group are associated (or correlated) with AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of Meta Financial i.e., Meta Financial and AOYAMA TRADING go up and down completely randomly.
Pair Corralation between Meta Financial and AOYAMA TRADING
Assuming the 90 days horizon Meta Financial Group is expected to generate 1.29 times more return on investment than AOYAMA TRADING. However, Meta Financial is 1.29 times more volatile than AOYAMA TRADING. It trades about 0.27 of its potential returns per unit of risk. AOYAMA TRADING is currently generating about 0.01 per unit of risk. If you would invest 7,150 in Meta Financial Group on November 7, 2024 and sell it today you would earn a total of 600.00 from holding Meta Financial Group or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Financial Group vs. AOYAMA TRADING
Performance |
| Timeline |
| Meta Financial Group |
| AOYAMA TRADING |
Meta Financial and AOYAMA TRADING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Financial and AOYAMA TRADING
The main advantage of trading using opposite Meta Financial and AOYAMA TRADING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Financial position performs unexpectedly, AOYAMA TRADING 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 AOYAMA TRADING will offset losses from the drop in AOYAMA TRADING's long position.| Meta Financial vs. Plastic Omnium | Meta Financial vs. GOODYEAR T RUBBER | Meta Financial vs. KOBE STEEL LTD | Meta Financial vs. Vulcan Materials |
| AOYAMA TRADING vs. SUN LIFE FINANCIAL | AOYAMA TRADING vs. YATRA ONLINE DL 0001 | AOYAMA TRADING vs. CarsalesCom | AOYAMA TRADING vs. CREDIT AGRICOLE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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