Correlation Between Graphjet Technology and Aeon

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

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

Diversification Opportunities for Graphjet Technology and Aeon

-0.45

Correlation Coefficient

Graphjet Technology  Aeon

Very good diversification

The 3 months correlation between Graphjet and Aeon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon and Graphjet Technology 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 Graphjet Technology 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 Graphjet Technology i.e., Graphjet Technology and Aeon go up and down completely randomly.

Pair Corralation between Graphjet Technology and Aeon

Considering the 90-day investment horizon Graphjet Technology is expected to generate 30.63 times less return on investment than Aeon. But when comparing it to its historical volatility, Graphjet Technology is 5.54 times less risky than Aeon. It trades about 0.02 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	32.78%
Values	Daily Returns

Graphjet Technology  vs.  Aeon Co

Graphjet Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Graphjet Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Graphjet Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Graphjet Technology and Aeon

The main advantage of trading using opposite Graphjet Technology and Aeon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphjet Technology 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 Graphjet Technology 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.