Correlation Between Asia Technology and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Asia Technology and Alton Sports 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 Asia Technology and Alton Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Technology Co and Alton Sports CoLtd, you can compare the effects of market volatilities on Asia Technology and Alton Sports 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 Asia Technology with a short position of Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Technology and Alton Sports.
Diversification Opportunities for Asia Technology and Alton Sports
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Alton is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Asia Technology Co and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd and Asia 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 Asia Technology Co are associated (or correlated) with Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Asia Technology i.e., Asia Technology and Alton Sports go up and down completely randomly.
Pair Corralation between Asia Technology and Alton Sports
Assuming the 90 days trading horizon Asia Technology Co is expected to generate 0.74 times more return on investment than Alton Sports. However, Asia Technology Co is 1.36 times less risky than Alton Sports. It trades about -0.03 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.13 per unit of risk. If you would invest 280,729 in Asia Technology Co on September 1, 2024 and sell it today you would lose (56,229) from holding Asia Technology Co or give up 20.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Technology Co vs. Alton Sports CoLtd
Performance |
| Timeline |
| Asia Technology |
| Alton Sports CoLtd |
Asia Technology and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Technology and Alton Sports
The main advantage of trading using opposite Asia Technology and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Technology position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Asia Technology vs. Korea New Network | Asia Technology vs. ICD Co | Asia Technology vs. DYPNF CoLtd | Asia Technology vs. Busan Industrial Co |
| Alton Sports vs. LG Display | Alton Sports vs. Hyundai Motor | Alton Sports vs. Hyundai Motor Co | Alton Sports vs. Hyundai Motor Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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