Correlation Between Yuexiu Transport and AEON MALL
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and AEON MALL 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 Yuexiu Transport and AEON MALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuexiu Transport Infrastructure and AEON MALL LTD, you can compare the effects of market volatilities on Yuexiu Transport and AEON MALL 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 Yuexiu Transport with a short position of AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and AEON MALL.
Diversification Opportunities for Yuexiu Transport and AEON MALL
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yuexiu and AEON is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and AEON MALL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON MALL LTD and Yuexiu Transport 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 Yuexiu Transport Infrastructure are associated (or correlated) with AEON MALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON MALL LTD has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and AEON MALL go up and down completely randomly.
Pair Corralation between Yuexiu Transport and AEON MALL
Assuming the 90 days horizon Yuexiu Transport is expected to generate 7.1 times less return on investment than AEON MALL. But when comparing it to its historical volatility, Yuexiu Transport Infrastructure is 1.81 times less risky than AEON MALL. It trades about 0.06 of its potential returns per unit of risk. AEON MALL LTD is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,194 in AEON MALL LTD on December 8, 2024 and sell it today you would earn a total of 246.00 from holding AEON MALL LTD or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. AEON MALL LTD
Performance |
| Timeline |
| Yuexiu Transport Inf |
| AEON MALL LTD |
Yuexiu Transport and AEON MALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and AEON MALL
The main advantage of trading using opposite Yuexiu Transport and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, AEON MALL 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 MALL will offset losses from the drop in AEON MALL's long position.| Yuexiu Transport vs. CHINA EDUCATION GROUP | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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