Correlation Between AOYAMA TRADING and Covivio SA

Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and Covivio SA 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 AOYAMA TRADING and Covivio SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AOYAMA TRADING and Covivio SA, you can compare the effects of market volatilities on AOYAMA TRADING and Covivio SA 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 AOYAMA TRADING with a short position of Covivio SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and Covivio SA.

Diversification Opportunities for AOYAMA TRADING and Covivio SA

0.06

Correlation Coefficient

AOYAMA TRADING  Covivio SA

Significant diversification

The 3 months correlation between AOYAMA and Covivio is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and Covivio SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio SA and AOYAMA TRADING 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 AOYAMA TRADING are associated (or correlated) with Covivio SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio SA has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and Covivio SA go up and down completely randomly.

Pair Corralation between AOYAMA TRADING and Covivio SA

Assuming the 90 days horizon AOYAMA TRADING is expected to under-perform the Covivio SA. But the stock apears to be less risky and, when comparing its historical volatility, AOYAMA TRADING is 1.24 times less risky than Covivio SA. The stock trades about -0.08 of its potential returns per unit of risk. The Covivio SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,848  in Covivio SA on December 23, 2024 and sell it today you would earn a total of  267.00  from holding Covivio SA or generate 5.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AOYAMA TRADING  vs.  Covivio SA

AOYAMA TRADING

Risk-Adjusted Performance

Very Weak

Over the last 90 days AOYAMA TRADING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AOYAMA TRADING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Covivio SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Covivio SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Covivio SA is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AOYAMA TRADING and Covivio SA

The main advantage of trading using opposite AOYAMA TRADING and Covivio SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, Covivio SA 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 Covivio SA will offset losses from the drop in Covivio SA's long position.

The idea behind AOYAMA TRADING and Covivio SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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..