Correlation Between AEON MALL and Hufvudstaden
Can any of the company-specific risk be diversified away by investing in both AEON MALL and Hufvudstaden 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 Hufvudstaden 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 Hufvudstaden AB, you can compare the effects of market volatilities on AEON MALL and Hufvudstaden 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 Hufvudstaden. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON MALL and Hufvudstaden.
Diversification Opportunities for AEON MALL and Hufvudstaden
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AEON and Hufvudstaden is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AEON MALL LTD and Hufvudstaden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hufvudstaden AB 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 Hufvudstaden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hufvudstaden AB has no effect on the direction of AEON MALL i.e., AEON MALL and Hufvudstaden go up and down completely randomly.
Pair Corralation between AEON MALL and Hufvudstaden
Assuming the 90 days horizon AEON MALL LTD is expected to generate 1.23 times more return on investment than Hufvudstaden. However, AEON MALL is 1.23 times more volatile than Hufvudstaden AB. It trades about -0.02 of its potential returns per unit of risk. Hufvudstaden AB is currently generating about -0.05 per unit of risk. If you would invest 1,220 in AEON MALL LTD on September 23, 2024 and sell it today you would lose (10.00) from holding AEON MALL LTD or give up 0.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AEON MALL LTD vs. Hufvudstaden AB
Performance |
Timeline |
AEON MALL LTD |
Hufvudstaden AB |
AEON MALL and Hufvudstaden Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AEON MALL and Hufvudstaden
The main advantage of trading using opposite AEON MALL and Hufvudstaden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON MALL position performs unexpectedly, Hufvudstaden 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 Hufvudstaden will offset losses from the drop in Hufvudstaden's long position.AEON MALL vs. NEW WORLD DEVCO | AEON MALL vs. OPEN HOUSE GROUP | AEON MALL vs. Hufvudstaden AB | AEON MALL vs. FRASERS PROPERTY |
Hufvudstaden vs. NEW WORLD DEVCO | Hufvudstaden vs. OPEN HOUSE GROUP | Hufvudstaden vs. AEON MALL LTD | Hufvudstaden vs. FRASERS PROPERTY |
Check out your portfolio center.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.
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