Correlation Between Ajinomoto and Yuenglings Ice

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

By analyzing existing cross correlation between Ajinomoto Co ADR and Yuenglings Ice Cream, you can compare the effects of market volatilities on Ajinomoto and Yuenglings Ice 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 Ajinomoto with a short position of Yuenglings Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ajinomoto and Yuenglings Ice.

Diversification Opportunities for Ajinomoto and Yuenglings Ice

-0.38

Correlation Coefficient

Ajinomoto  Yuenglings Ice

Very good diversification

The 3 months correlation between Ajinomoto and Yuenglings is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ajinomoto Co ADR and Yuenglings Ice Cream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuenglings Ice Cream and Ajinomoto 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 Ajinomoto Co ADR are associated (or correlated) with Yuenglings Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuenglings Ice Cream has no effect on the direction of Ajinomoto i.e., Ajinomoto and Yuenglings Ice go up and down completely randomly.

Pair Corralation between Ajinomoto and Yuenglings Ice

Assuming the 90 days horizon Ajinomoto is expected to generate 89.42 times less return on investment than Yuenglings Ice. But when comparing it to its historical volatility, Ajinomoto Co ADR is 10.9 times less risky than Yuenglings Ice. It trades about 0.01 of its potential returns per unit of risk. Yuenglings Ice Cream is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.14  in Yuenglings Ice Cream on October 3, 2024 and sell it today you would earn a total of  0.15  from holding Yuenglings Ice Cream or generate 107.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.49%
Values	Daily Returns

Ajinomoto Co ADR  vs.  Yuenglings Ice Cream

Ajinomoto Co ADR

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ajinomoto Co ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Ajinomoto is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Yuenglings Ice Cream

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yuenglings Ice Cream are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Yuenglings Ice displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ajinomoto and Yuenglings Ice

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

The idea behind Ajinomoto Co ADR and Yuenglings Ice Cream 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.