Correlation Between NEW WORLD and AEON MALL
Can any of the company-specific risk be diversified away by investing in both NEW WORLD 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 NEW WORLD and AEON MALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW WORLD DEVCO and AEON MALL LTD, you can compare the effects of market volatilities on NEW WORLD 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 NEW WORLD with a short position of AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW WORLD and AEON MALL.
Diversification Opportunities for NEW WORLD and AEON MALL
Very weak diversification
The 3 months correlation between NEW and AEON is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NEW WORLD DEVCO 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 NEW WORLD 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 NEW WORLD DEVCO 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 NEW WORLD i.e., NEW WORLD and AEON MALL go up and down completely randomly.
Pair Corralation between NEW WORLD and AEON MALL
Assuming the 90 days trading horizon NEW WORLD DEVCO is expected to under-perform the AEON MALL. In addition to that, NEW WORLD is 2.89 times more volatile than AEON MALL LTD. It trades about -0.28 of its total potential returns per unit of risk. AEON MALL LTD is currently generating about 0.04 per unit of volatility. If you would invest 1,200 in AEON MALL LTD on September 24, 2024 and sell it today you would earn a total of 10.00 from holding AEON MALL LTD or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW WORLD DEVCO vs. AEON MALL LTD
Performance |
| Timeline |
| NEW WORLD DEVCO |
| AEON MALL LTD |
NEW WORLD and AEON MALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW WORLD and AEON MALL
The main advantage of trading using opposite NEW WORLD and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW WORLD 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.| NEW WORLD vs. OPEN HOUSE GROUP | NEW WORLD vs. AEON MALL LTD | NEW WORLD vs. Hufvudstaden AB | NEW WORLD vs. FRASERS PROPERTY |
| AEON MALL vs. NEW WORLD DEVCO | AEON MALL vs. OPEN HOUSE GROUP | AEON MALL vs. Hufvudstaden AB | AEON MALL vs. FRASERS PROPERTY |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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