Correlation Between AOYAMA TRADING and Genesco

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

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

Diversification Opportunities for AOYAMA TRADING and Genesco

0.51

Correlation Coefficient

AOYAMA TRADING  Genesco

Very weak diversification

The 3 months correlation between AOYAMA and Genesco is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco 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 Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and Genesco go up and down completely randomly.

Pair Corralation between AOYAMA TRADING and Genesco

Assuming the 90 days horizon AOYAMA TRADING is expected to generate 0.26 times more return on investment than Genesco. However, AOYAMA TRADING is 3.78 times less risky than Genesco. It trades about -0.07 of its potential returns per unit of risk. Genesco is currently generating about -0.22 per unit of risk. If you would invest  1,297  in AOYAMA TRADING on December 29, 2024 and sell it today you would lose (67.00) from holding AOYAMA TRADING or give up 5.17% of portfolio value over 90 days.

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

AOYAMA TRADING  vs.  Genesco

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.

Genesco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genesco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AOYAMA TRADING and Genesco

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

The idea behind AOYAMA TRADING and Genesco 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.