Correlation Between AEON MALL and CHIBA BANK

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

By analyzing existing cross correlation between AEON MALL LTD and CHIBA BANK, you can compare the effects of market volatilities on AEON MALL and CHIBA BANK 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 AEON MALL with a short position of CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON MALL and CHIBA BANK.

Diversification Opportunities for AEON MALL and CHIBA BANK

0.53

Correlation Coefficient

AEON MALL  CHIBA BANK

Very weak diversification

The 3 months correlation between AEON and CHIBA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AEON MALL LTD and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA BANK and AEON MALL 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 AEON MALL LTD are associated (or correlated) with CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of AEON MALL i.e., AEON MALL and CHIBA BANK go up and down completely randomly.

Pair Corralation between AEON MALL and CHIBA BANK

Assuming the 90 days horizon AEON MALL is expected to generate 1.25 times less return on investment than CHIBA BANK. In addition to that, AEON MALL is 1.74 times more volatile than CHIBA BANK. It trades about 0.11 of its total potential returns per unit of risk. CHIBA BANK is currently generating about 0.24 per unit of volatility. If you would invest  730.00  in CHIBA BANK on December 28, 2024 and sell it today you would earn a total of  175.00  from holding CHIBA BANK or generate 23.97% return on investment over 90 days.

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

AEON MALL LTD  vs.  CHIBA BANK

AEON MALL LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AEON MALL LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, AEON MALL reported solid returns over the last few months and may actually be approaching a breakup point.

CHIBA BANK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CHIBA BANK are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CHIBA BANK exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AEON MALL and CHIBA BANK

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

The idea behind AEON MALL LTD and CHIBA BANK 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..