Correlation Between AOYAMA TRADING and Klépierre

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

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

Diversification Opportunities for AOYAMA TRADING and Klépierre

-0.39

Correlation Coefficient

AOYAMA TRADING  Klépierre

Very good diversification

The 3 months correlation between AOYAMA and Klépierre is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre 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 Klépierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and Klépierre go up and down completely randomly.

Pair Corralation between AOYAMA TRADING and Klépierre

Assuming the 90 days horizon AOYAMA TRADING is expected to generate 4.92 times less return on investment than Klépierre. In addition to that, AOYAMA TRADING is 1.26 times more volatile than Klpierre SA. It trades about 0.07 of its total potential returns per unit of risk. Klpierre SA is currently generating about 0.45 per unit of volatility. If you would invest  2,852  in Klpierre SA on December 4, 2024 and sell it today you would earn a total of  232.00  from holding Klpierre SA or generate 8.13% return on investment over 90 days.

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

AOYAMA TRADING  vs.  Klpierre 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.

Klpierre SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Klpierre SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Klépierre may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AOYAMA TRADING and Klépierre

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

The idea behind AOYAMA TRADING and Klpierre 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.