Correlation Between Greatech Technology and AirAsia X
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and AirAsia X 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 Greatech Technology and AirAsia X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and AirAsia X Bhd, you can compare the effects of market volatilities on Greatech Technology and AirAsia X 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 Greatech Technology with a short position of AirAsia X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and AirAsia X.
Diversification Opportunities for Greatech Technology and AirAsia X
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greatech and AirAsia is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and AirAsia X Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirAsia X Bhd and Greatech 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 Greatech Technology Bhd are associated (or correlated) with AirAsia X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirAsia X Bhd has no effect on the direction of Greatech Technology i.e., Greatech Technology and AirAsia X go up and down completely randomly.
Pair Corralation between Greatech Technology and AirAsia X
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to under-perform the AirAsia X. But the stock apears to be less risky and, when comparing its historical volatility, Greatech Technology Bhd is 1.32 times less risky than AirAsia X. The stock trades about -0.38 of its potential returns per unit of risk. The AirAsia X Bhd is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 200.00 in AirAsia X Bhd on November 4, 2024 and sell it today you would lose (20.00) from holding AirAsia X Bhd or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. AirAsia X Bhd
Performance |
| Timeline |
| Greatech Technology Bhd |
| AirAsia X Bhd |
Greatech Technology and AirAsia X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and AirAsia X
The main advantage of trading using opposite Greatech Technology and AirAsia X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, AirAsia X 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 AirAsia X will offset losses from the drop in AirAsia X's long position.| Greatech Technology vs. Shangri La Hotels | Greatech Technology vs. YX Precious Metals | Greatech Technology vs. Kluang Rubber | Greatech Technology vs. Press Metal Bhd |
| AirAsia X vs. Cosmos Technology International | AirAsia X vs. Mycron Steel Bhd | AirAsia X vs. YX Precious Metals | AirAsia X vs. PMB Technology Bhd |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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