Correlation Between SM Investments and Aeon Co
Can any of the company-specific risk be diversified away by investing in both SM Investments and Aeon Co 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 SM Investments and Aeon Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Investments and Aeon Co Ltd, you can compare the effects of market volatilities on SM Investments and Aeon Co 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 SM Investments with a short position of Aeon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and Aeon Co.
Diversification Opportunities for SM Investments and Aeon Co
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SVTMF and Aeon is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments and Aeon Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Co and SM Investments 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 SM Investments are associated (or correlated) with Aeon Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Co has no effect on the direction of SM Investments i.e., SM Investments and Aeon Co go up and down completely randomly.
Pair Corralation between SM Investments and Aeon Co
Assuming the 90 days horizon SM Investments is expected to generate 1.6 times less return on investment than Aeon Co. In addition to that, SM Investments is 1.39 times more volatile than Aeon Co Ltd. It trades about 0.02 of its total potential returns per unit of risk. Aeon Co Ltd is currently generating about 0.04 per unit of volatility. If you would invest 2,091 in Aeon Co Ltd on August 27, 2024 and sell it today you would earn a total of 276.00 from holding Aeon Co Ltd or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 62.9% |
| Values | Daily Returns |
SM Investments vs. Aeon Co Ltd
Performance |
| Timeline |
| SM Investments |
| Aeon Co |
SM Investments and Aeon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Investments and Aeon Co
The main advantage of trading using opposite SM Investments and Aeon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments position performs unexpectedly, Aeon Co 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 Co will offset losses from the drop in Aeon Co's long position.| SM Investments vs. Kohls Corp | SM Investments vs. Nordstrom | SM Investments vs. Macys Inc | SM Investments vs. Dillards |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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