Correlation Between AeroVironment and AEON STORES
Can any of the company-specific risk be diversified away by investing in both AeroVironment and AEON STORES 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 AeroVironment and AEON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroVironment and AEON STORES, you can compare the effects of market volatilities on AeroVironment and AEON STORES 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 AeroVironment with a short position of AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroVironment and AEON STORES.
Diversification Opportunities for AeroVironment and AEON STORES
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AeroVironment and AEON is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AeroVironment and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES and AeroVironment 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 AeroVironment are associated (or correlated) with AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of AeroVironment i.e., AeroVironment and AEON STORES go up and down completely randomly.
Pair Corralation between AeroVironment and AEON STORES
Assuming the 90 days horizon AeroVironment is expected to generate 4.37 times more return on investment than AEON STORES. However, AeroVironment is 4.37 times more volatile than AEON STORES. It trades about 0.03 of its potential returns per unit of risk. AEON STORES is currently generating about -0.03 per unit of risk. If you would invest 15,715 in AeroVironment on October 18, 2024 and sell it today you would earn a total of 660.00 from holding AeroVironment or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AeroVironment vs. AEON STORES
Performance |
| Timeline |
| AeroVironment |
| AEON STORES |
AeroVironment and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroVironment and AEON STORES
The main advantage of trading using opposite AeroVironment and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroVironment position performs unexpectedly, AEON STORES 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 STORES will offset losses from the drop in AEON STORES's long position.| AeroVironment vs. bet at home AG | AeroVironment vs. PICKN PAY STORES | AeroVironment vs. MARKET VECTR RETAIL | AeroVironment vs. Retail Estates NV |
| AEON STORES vs. Keck Seng Investments | AEON STORES vs. Guangdong Investment Limited | AEON STORES vs. JD SPORTS FASH | AEON STORES vs. Jacquet Metal Service |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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