Correlation Between AEON MALL and Citycon Oyj

Can any of the company-specific risk be diversified away by investing in both AEON MALL and Citycon Oyj 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 Citycon Oyj 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 Citycon Oyj, you can compare the effects of market volatilities on AEON MALL and Citycon Oyj 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 Citycon Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON MALL and Citycon Oyj.

Diversification Opportunities for AEON MALL and Citycon Oyj

0.77

Correlation Coefficient

AEON MALL  Citycon Oyj

Poor diversification

The 3 months correlation between AEON and Citycon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AEON MALL LTD and Citycon Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citycon Oyj 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 Citycon Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citycon Oyj has no effect on the direction of AEON MALL i.e., AEON MALL and Citycon Oyj go up and down completely randomly.

Pair Corralation between AEON MALL and Citycon Oyj

Assuming the 90 days horizon AEON MALL LTD is expected to generate 0.68 times more return on investment than Citycon Oyj. However, AEON MALL LTD is 1.47 times less risky than Citycon Oyj. It trades about -0.04 of its potential returns per unit of risk. Citycon Oyj is currently generating about -0.19 per unit of risk. If you would invest  1,260  in AEON MALL LTD on September 23, 2024 and sell it today you would lose (50.00) from holding AEON MALL LTD or give up 3.97% of portfolio value over 90 days.

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

AEON MALL LTD  vs.  Citycon Oyj

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.

Citycon Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citycon Oyj 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 Citycon Oyj

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

The idea behind AEON MALL LTD and Citycon Oyj 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..