Correlation Between DATA MODUL and AOYAMA TRADING

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

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

Diversification Opportunities for DATA MODUL and AOYAMA TRADING

-0.02

Correlation Coefficient

DATA MODUL  AOYAMA TRADING

Good diversification

The 3 months correlation between DATA and AOYAMA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding DATA MODUL and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING and DATA MODUL 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 DATA MODUL are associated (or correlated) with AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of DATA MODUL i.e., DATA MODUL and AOYAMA TRADING go up and down completely randomly.

Pair Corralation between DATA MODUL and AOYAMA TRADING

Assuming the 90 days trading horizon DATA MODUL is expected to generate 8.48 times less return on investment than AOYAMA TRADING. But when comparing it to its historical volatility, DATA MODUL is 1.85 times less risky than AOYAMA TRADING. It trades about 0.04 of its potential returns per unit of risk. AOYAMA TRADING is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  830.00  in AOYAMA TRADING on October 10, 2024 and sell it today you would earn a total of  520.00  from holding AOYAMA TRADING or generate 62.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

DATA MODUL   vs.  AOYAMA TRADING

DATA MODUL

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DATA MODUL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, DATA MODUL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AOYAMA TRADING

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AOYAMA TRADING are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AOYAMA TRADING reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DATA MODUL and AOYAMA TRADING

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

The idea behind DATA MODUL and AOYAMA TRADING 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.