Correlation Between AOYAMA TRADING and Seven West

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

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

Diversification Opportunities for AOYAMA TRADING and Seven West

-0.67

Correlation Coefficient

AOYAMA TRADING  Seven West

Excellent diversification

The 3 months correlation between AOYAMA and Seven is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and Seven West go up and down completely randomly.

Pair Corralation between AOYAMA TRADING and Seven West

Assuming the 90 days horizon AOYAMA TRADING is expected to generate 1.05 times more return on investment than Seven West. However, AOYAMA TRADING is 1.05 times more volatile than Seven West Media. It trades about 0.08 of its potential returns per unit of risk. Seven West Media is currently generating about -0.03 per unit of risk. If you would invest  330.00  in AOYAMA TRADING on October 23, 2024 and sell it today you would earn a total of  1,010  from holding AOYAMA TRADING or generate 306.06% return on investment over 90 days.

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

AOYAMA TRADING  vs.  Seven West Media

AOYAMA TRADING

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AOYAMA TRADING are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AOYAMA TRADING reported solid returns over the last few months and may actually be approaching a breakup point.

Seven West Media

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AOYAMA TRADING and Seven West

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

The idea behind AOYAMA TRADING and Seven West Media 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.