Correlation Between Sterling Construction and AEON MALL
Can any of the company-specific risk be diversified away by investing in both Sterling Construction 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 Sterling Construction and AEON MALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and AEON MALL LTD, you can compare the effects of market volatilities on Sterling Construction 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 Sterling Construction with a short position of AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and AEON MALL.
Diversification Opportunities for Sterling Construction and AEON MALL
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sterling and AEON is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction 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 Sterling Construction 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 Sterling Construction 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 Sterling Construction i.e., Sterling Construction and AEON MALL go up and down completely randomly.
Pair Corralation between Sterling Construction and AEON MALL
Assuming the 90 days horizon Sterling Construction is expected to under-perform the AEON MALL. In addition to that, Sterling Construction is 1.97 times more volatile than AEON MALL LTD. It trades about -0.04 of its total potential returns per unit of risk. AEON MALL LTD is currently generating about 0.06 per unit of volatility. If you would invest 1,210 in AEON MALL LTD on September 13, 2024 and sell it today you would earn a total of 20.00 from holding AEON MALL LTD or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. AEON MALL LTD
Performance |
| Timeline |
| Sterling Construction |
| AEON MALL LTD |
Sterling Construction and AEON MALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and AEON MALL
The main advantage of trading using opposite Sterling Construction and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction 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.| Sterling Construction vs. Superior Plus Corp | Sterling Construction vs. SIVERS SEMICONDUCTORS AB | Sterling Construction vs. Norsk Hydro ASA | Sterling Construction vs. Reliance Steel Aluminum |
| AEON MALL vs. Shenandoah Telecommunications | AEON MALL vs. REGAL ASIAN INVESTMENTS | AEON MALL vs. Consolidated Communications Holdings | AEON MALL vs. Mobilezone Holding AG |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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