Correlation Between AEON MALL and Immofinanz

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

By analyzing existing cross correlation between AEON MALL LTD and Immofinanz AG, you can compare the effects of market volatilities on AEON MALL and Immofinanz 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 MALL with a short position of Immofinanz. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON MALL and Immofinanz.

Diversification Opportunities for AEON MALL and Immofinanz

0.6

Correlation Coefficient

AEON MALL  Immofinanz

Poor diversification

The 3 months correlation between AEON and Immofinanz is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AEON MALL LTD and Immofinanz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immofinanz AG and AEON MALL 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 MALL LTD are associated (or correlated) with Immofinanz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immofinanz AG has no effect on the direction of AEON MALL i.e., AEON MALL and Immofinanz go up and down completely randomly.

Pair Corralation between AEON MALL and Immofinanz

Assuming the 90 days horizon AEON MALL is expected to generate 4.92 times less return on investment than Immofinanz. But when comparing it to its historical volatility, AEON MALL LTD is 1.45 times less risky than Immofinanz. It trades about 0.01 of its potential returns per unit of risk. Immofinanz AG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,154  in Immofinanz AG on September 23, 2024 and sell it today you would earn a total of  330.00  from holding Immofinanz AG or generate 28.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AEON MALL LTD  vs.  Immofinanz AG

AEON MALL LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEON MALL LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AEON MALL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Immofinanz AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immofinanz AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AEON MALL and Immofinanz

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

The idea behind AEON MALL LTD and Immofinanz AG 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.