Correlation Between AEON STORES and Expedia
Can any of the company-specific risk be diversified away by investing in both AEON STORES and Expedia 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 STORES and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON STORES and Expedia Group, you can compare the effects of market volatilities on AEON STORES and Expedia 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 STORES with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and Expedia.
Diversification Opportunities for AEON STORES and Expedia
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between AEON and Expedia is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and AEON STORES 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 STORES are associated (or correlated) with Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of AEON STORES i.e., AEON STORES and Expedia go up and down completely randomly.
Pair Corralation between AEON STORES and Expedia
Assuming the 90 days trading horizon AEON STORES is expected to generate 0.18 times more return on investment than Expedia. However, AEON STORES is 5.58 times less risky than Expedia. It trades about 0.13 of its potential returns per unit of risk. Expedia Group is currently generating about -0.04 per unit of risk. If you would invest 5.65 in AEON STORES on December 29, 2024 and sell it today you would earn a total of 0.25 from holding AEON STORES or generate 4.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
AEON STORES vs. Expedia Group
Performance |
Timeline |
AEON STORES |
Expedia Group |
AEON STORES and Expedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AEON STORES and Expedia
The main advantage of trading using opposite AEON STORES and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES position performs unexpectedly, Expedia 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 Expedia will offset losses from the drop in Expedia's long position.AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc |
Expedia vs. DATANG INTL POW | Expedia vs. Alibaba Health Information | Expedia vs. MICRONIC MYDATA | Expedia vs. Stewart Information Services |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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