Correlation Between Carsales and AEON MALL
Can any of the company-specific risk be diversified away by investing in both Carsales 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 Carsales and AEON MALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carsales and AEON MALL LTD, you can compare the effects of market volatilities on Carsales 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 Carsales with a short position of AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and AEON MALL.
Diversification Opportunities for Carsales and AEON MALL
Very good diversification
The 3 months correlation between Carsales and AEON is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Carsales 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 Carsales 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 Carsales 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 Carsales i.e., Carsales and AEON MALL go up and down completely randomly.
Pair Corralation between Carsales and AEON MALL
Assuming the 90 days trading horizon Carsales is expected to under-perform the AEON MALL. In addition to that, Carsales is 1.06 times more volatile than AEON MALL LTD. It trades about -0.22 of its total potential returns per unit of risk. AEON MALL LTD is currently generating about 0.01 per unit of volatility. If you would invest 1,200 in AEON MALL LTD on September 19, 2024 and sell it today you would earn a total of 0.00 from holding AEON MALL LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carsales vs. AEON MALL LTD
Performance |
| Timeline |
| Carsales |
| AEON MALL LTD |
Carsales and AEON MALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and AEON MALL
The main advantage of trading using opposite Carsales and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales 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.| Carsales vs. Choice Hotels International | Carsales vs. Host Hotels Resorts | Carsales vs. Gol Intelligent Airlines | Carsales vs. DALATA HOTEL |
| AEON MALL vs. TROPHY GAMES DEV | AEON MALL vs. GigaMedia | AEON MALL vs. The Trade Desk | AEON MALL vs. Carsales |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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