Correlation Between AEON STORES and VIETNAM ENTERPRISE

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

By analyzing existing cross correlation between AEON STORES and VIETNAM ENTERPRISE INV, you can compare the effects of market volatilities on AEON STORES and VIETNAM ENTERPRISE 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 VIETNAM ENTERPRISE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and VIETNAM ENTERPRISE.

Diversification Opportunities for AEON STORES and VIETNAM ENTERPRISE

-0.49

Correlation Coefficient

AEON STORES  VIETNAM ENTERPRISE

Very good diversification

The 3 months correlation between AEON and VIETNAM is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES and VIETNAM ENTERPRISE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIETNAM ENTERPRISE INV 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 VIETNAM ENTERPRISE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIETNAM ENTERPRISE INV has no effect on the direction of AEON STORES i.e., AEON STORES and VIETNAM ENTERPRISE go up and down completely randomly.

Pair Corralation between AEON STORES and VIETNAM ENTERPRISE

Assuming the 90 days trading horizon AEON STORES is expected to under-perform the VIETNAM ENTERPRISE. In addition to that, AEON STORES is 1.53 times more volatile than VIETNAM ENTERPRISE INV. It trades about -0.07 of its total potential returns per unit of risk. VIETNAM ENTERPRISE INV is currently generating about 0.04 per unit of volatility. If you would invest  685.00  in VIETNAM ENTERPRISE INV on October 22, 2024 and sell it today you would earn a total of  5.00  from holding VIETNAM ENTERPRISE INV or generate 0.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AEON STORES  vs.  VIETNAM ENTERPRISE INV

AEON STORES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEON STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AEON STORES is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

VIETNAM ENTERPRISE INV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIETNAM ENTERPRISE INV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VIETNAM ENTERPRISE 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 STORES and VIETNAM ENTERPRISE

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

The idea behind AEON STORES and VIETNAM ENTERPRISE INV 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.