Correlation Between FLOW TRADERS and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Aozora Bank, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Aozora Bank.
Diversification Opportunities for FLOW TRADERS and Aozora Bank
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FLOW and Aozora is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Aozora Bank go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Aozora Bank
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.73 times more return on investment than Aozora Bank. However, FLOW TRADERS LTD is 1.37 times less risky than Aozora Bank. It trades about 0.05 of its potential returns per unit of risk. Aozora Bank is currently generating about -0.02 per unit of risk. If you would invest 1,721 in FLOW TRADERS LTD on September 14, 2024 and sell it today you would earn a total of 385.00 from holding FLOW TRADERS LTD or generate 22.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Aozora Bank
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Aozora Bank |
FLOW TRADERS and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Aozora Bank
The main advantage of trading using opposite FLOW TRADERS and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. SIVERS SEMICONDUCTORS AB | FLOW TRADERS vs. CHINA HUARONG ENERHD 50 | FLOW TRADERS vs. NORDIC HALIBUT AS |
| Aozora Bank vs. Mitsui Chemicals | Aozora Bank vs. FLOW TRADERS LTD | Aozora Bank vs. MCEWEN MINING INC | Aozora Bank vs. MARKET VECTR RETAIL |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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