Correlation Between National Plastic and Asia Seed
Can any of the company-specific risk be diversified away by investing in both National Plastic and Asia Seed 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 National Plastic and Asia Seed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Plastic Co and Asia Seed CoLtd, you can compare the effects of market volatilities on National Plastic and Asia Seed 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 National Plastic with a short position of Asia Seed. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Plastic and Asia Seed.
Diversification Opportunities for National Plastic and Asia Seed
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Asia is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding National Plastic Co and Asia Seed CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Seed CoLtd and National Plastic 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 National Plastic Co are associated (or correlated) with Asia Seed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Seed CoLtd has no effect on the direction of National Plastic i.e., National Plastic and Asia Seed go up and down completely randomly.
Pair Corralation between National Plastic and Asia Seed
Assuming the 90 days trading horizon National Plastic Co is expected to generate 0.71 times more return on investment than Asia Seed. However, National Plastic Co is 1.41 times less risky than Asia Seed. It trades about -0.06 of its potential returns per unit of risk. Asia Seed CoLtd is currently generating about -0.07 per unit of risk. If you would invest 365,863 in National Plastic Co on November 27, 2024 and sell it today you would lose (120,863) from holding National Plastic Co or give up 33.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Plastic Co vs. Asia Seed CoLtd
Performance |
| Timeline |
| National Plastic |
| Asia Seed CoLtd |
National Plastic and Asia Seed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Plastic and Asia Seed
The main advantage of trading using opposite National Plastic and Asia Seed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Plastic position performs unexpectedly, Asia Seed 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 Asia Seed will offset losses from the drop in Asia Seed's long position.| National Plastic vs. Hyundai BNG Steel | National Plastic vs. BooKook Steel Co | National Plastic vs. ITM Semiconductor Co | National Plastic vs. Dongil Steel Co |
| Asia Seed vs. Seoul Food Industrial | Asia Seed vs. Sempio Foods Co | Asia Seed vs. Shinsegae Food | Asia Seed vs. Namyang Dairy |
Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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