Correlation Between Hang Seng and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both Hang Seng 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 Hang Seng and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hang Seng Bank and Aozora Bank, you can compare the effects of market volatilities on Hang Seng 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 Hang Seng with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Seng and Aozora Bank.
Diversification Opportunities for Hang Seng and Aozora Bank
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hang and Aozora is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hang Seng Bank and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and Hang Seng 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 Hang Seng Bank 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 Hang Seng i.e., Hang Seng and Aozora Bank go up and down completely randomly.
Pair Corralation between Hang Seng and Aozora Bank
If you would invest 1,182 in Hang Seng Bank on November 4, 2024 and sell it today you would earn a total of 73.00 from holding Hang Seng Bank or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.5% |
| Values | Daily Returns |
Hang Seng Bank vs. Aozora Bank
Performance |
| Timeline |
| Hang Seng Bank |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hang Seng and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Seng and Aozora Bank
The main advantage of trading using opposite Hang Seng and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Seng 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.| Hang Seng vs. Caixabank SA ADR | Hang Seng vs. Commercial International Bank | Hang Seng vs. PT Bank Rakyat | Hang Seng vs. Riverview Bancorp |
| Aozora Bank vs. Amkor Technology | Aozora Bank vs. Lindblad Expeditions Holdings | Aozora Bank vs. Norfolk Southern | Aozora Bank vs. Olympic Steel |
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 CEOs Directory module to screen CEOs from public companies around the world.
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