Correlation Between Aozora Bank and Bank Of Georgia
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Bank Of Georgia 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 Aozora Bank and Bank Of Georgia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank Ltd and Bank Of Georgia, you can compare the effects of market volatilities on Aozora Bank and Bank Of Georgia 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 Aozora Bank with a short position of Bank Of Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Bank Of Georgia.
Diversification Opportunities for Aozora Bank and Bank Of Georgia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aozora and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank Ltd and Bank Of Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Of Georgia and Aozora Bank 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 Aozora Bank Ltd are associated (or correlated) with Bank Of Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Of Georgia has no effect on the direction of Aozora Bank i.e., Aozora Bank and Bank Of Georgia go up and down completely randomly.
Pair Corralation between Aozora Bank and Bank Of Georgia
If you would invest (100.00) in Bank Of Georgia on November 15, 2024 and sell it today you would earn a total of 100.00 from holding Bank Of Georgia or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Aozora Bank Ltd vs. Bank Of Georgia
Performance |
Timeline |
Aozora Bank |
Bank Of Georgia |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Aozora Bank and Bank Of Georgia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aozora Bank and Bank Of Georgia
The main advantage of trading using opposite Aozora Bank and Bank Of Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Bank Of Georgia 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 Bank Of Georgia will offset losses from the drop in Bank Of Georgia's long position.The idea behind Aozora Bank Ltd and Bank Of Georgia 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.Bank Of Georgia vs. Andover Bancorp | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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