Correlation Between Aeon Co and Marks
Can any of the company-specific risk be diversified away by investing in both Aeon Co and Marks 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 Aeon Co and Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Co and Marks and Spencer, you can compare the effects of market volatilities on Aeon Co and Marks 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 Aeon Co with a short position of Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Co and Marks.
Diversification Opportunities for Aeon Co and Marks
Average diversification
The 3 months correlation between Aeon and Marks is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Co and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer and Aeon Co 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 Aeon Co are associated (or correlated) with Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Aeon Co i.e., Aeon Co and Marks go up and down completely randomly.
Pair Corralation between Aeon Co and Marks
Assuming the 90 days trading horizon Aeon Co is expected to generate 3.05 times less return on investment than Marks. But when comparing it to its historical volatility, Aeon Co is 1.81 times less risky than Marks. It trades about 0.05 of its potential returns per unit of risk. Marks and Spencer is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 167.00 in Marks and Spencer on December 2, 2024 and sell it today you would earn a total of 262.00 from holding Marks and Spencer or generate 156.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Co vs. Marks and Spencer
Performance |
| Timeline |
| Aeon Co |
| Marks and Spencer |
Aeon Co and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Co and Marks
The main advantage of trading using opposite Aeon Co and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Co position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Aeon Co vs. CanSino Biologics | Aeon Co vs. HK Electric Investments | Aeon Co vs. Apollo Investment Corp | Aeon Co vs. EBRO FOODS |
| Marks vs. ALERION CLEANPOWER | Marks vs. Marie Brizard Wine | Marks vs. VIVA WINE GROUP | Marks vs. Ming Le Sports |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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