Correlation Between Asia Economy and Insung Information
Can any of the company-specific risk be diversified away by investing in both Asia Economy and Insung Information 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 Economy and Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Economy Daily and Insung Information Co, you can compare the effects of market volatilities on Asia Economy and Insung Information 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 Economy with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Economy and Insung Information.
Diversification Opportunities for Asia Economy and Insung Information
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Insung is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Asia Economy Daily and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information and Asia Economy 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 Economy Daily are associated (or correlated) with Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Asia Economy i.e., Asia Economy and Insung Information go up and down completely randomly.
Pair Corralation between Asia Economy and Insung Information
Assuming the 90 days trading horizon Asia Economy Daily is expected to generate 1.14 times more return on investment than Insung Information. However, Asia Economy is 1.14 times more volatile than Insung Information Co. It trades about 0.3 of its potential returns per unit of risk. Insung Information Co is currently generating about 0.33 per unit of risk. If you would invest 144,300 in Asia Economy Daily on October 9, 2024 and sell it today you would earn a total of 28,800 from holding Asia Economy Daily or generate 19.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Economy Daily vs. Insung Information Co
Performance |
| Timeline |
| Asia Economy Daily |
| Insung Information |
Asia Economy and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Economy and Insung Information
The main advantage of trading using opposite Asia Economy and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Economy position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Asia Economy vs. Top Material Co | Asia Economy vs. Hyosung Advanced Materials | Asia Economy vs. Solus Advanced Materials | Asia Economy vs. Iljin Display |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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