Correlation Between Panasonic Corp and Aeon
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and Aeon 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 Panasonic Corp and Aeon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and Aeon Co, you can compare the effects of market volatilities on Panasonic Corp and Aeon 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 Panasonic Corp with a short position of Aeon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and Aeon.
Diversification Opportunities for Panasonic Corp and Aeon
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Panasonic and Aeon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with Aeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and Aeon go up and down completely randomly.
Pair Corralation between Panasonic Corp and Aeon
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 5.43 times less return on investment than Aeon. In addition to that, Panasonic Corp is 1.46 times more volatile than Aeon Co. It trades about 0.01 of its total potential returns per unit of risk. Aeon Co is currently generating about 0.06 per unit of volatility. If you would invest 1,870 in Aeon Co on September 14, 2024 and sell it today you would earn a total of 430.00 from holding Aeon Co or generate 22.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panasonic Corp vs. Aeon Co
Performance |
| Timeline |
| Panasonic Corp |
| Aeon |
Panasonic Corp and Aeon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic Corp and Aeon
The main advantage of trading using opposite Panasonic Corp and Aeon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, Aeon 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 will offset losses from the drop in Aeon's long position.| Panasonic Corp vs. Perdoceo Education | Panasonic Corp vs. Corporate Travel Management | Panasonic Corp vs. Lion One Metals | Panasonic Corp vs. Waste Management |
| Aeon vs. DISTRICT METALS | Aeon vs. STMicroelectronics NV | Aeon vs. AOI Electronics Co | Aeon vs. Meiko Electronics Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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