Correlation Between AION and DIA

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

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

Diversification Opportunities for AION and DIA

-0.17

Correlation Coefficient

AION  DIA

Good diversification

The 3 months correlation between AION and DIA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AION and DIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIA and AION 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 AION are associated (or correlated) with DIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIA has no effect on the direction of AION i.e., AION and DIA go up and down completely randomly.

Pair Corralation between AION and DIA

Assuming the 90 days trading horizon AION is expected to generate 3.31 times more return on investment than DIA. However, AION is 3.31 times more volatile than DIA. It trades about 0.16 of its potential returns per unit of risk. DIA is currently generating about 0.16 per unit of risk. If you would invest  0.08  in AION on April 24, 2025 and sell it today you would earn a total of  0.02  from holding AION or generate 26.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

AION  vs.  DIA

AION

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AION are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, AION exhibited solid returns over the last few months and may actually be approaching a breakup point.

DIA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DIA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DIA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AION and DIA

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

The idea behind AION and DIA 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 Stocks Directory module to find actively traded stocks across global markets.