Correlation Between Aeon Co and Aeon

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

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

Diversification Opportunities for Aeon Co and Aeon

-0.5

Correlation Coefficient

Aeon Co  Aeon

Very good diversification

The 3 months correlation between Aeon and Aeon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Co Ltd and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon and Aeon Co 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 Co Ltd are associated (or correlated) with Aeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon has no effect on the direction of Aeon Co i.e., Aeon Co and Aeon go up and down completely randomly.

Pair Corralation between Aeon Co and Aeon

Assuming the 90 days horizon Aeon Co is expected to generate 192.6 times less return on investment than Aeon. But when comparing it to its historical volatility, Aeon Co Ltd is 66.37 times less risky than Aeon. It trades about 0.03 of its potential returns per unit of risk. Aeon Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  153.00  in Aeon Co on October 5, 2024 and sell it today you would earn a total of  1,912  from holding Aeon Co or generate 1249.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	24.84%
Values	Daily Returns

Aeon Co Ltd  vs.  Aeon Co

Aeon Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeon Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Aeon

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aeon Co and Aeon

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

The idea behind Aeon Co Ltd and Aeon Co 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.