Correlation Between Asia Economy and Aloys
Can any of the company-specific risk be diversified away by investing in both Asia Economy and Aloys 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 Aloys 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 Aloys Inc, you can compare the effects of market volatilities on Asia Economy and Aloys 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 Aloys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Economy and Aloys.
Diversification Opportunities for Asia Economy and Aloys
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asia and Aloys is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Asia Economy Daily and Aloys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aloys Inc 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 Aloys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aloys Inc has no effect on the direction of Asia Economy i.e., Asia Economy and Aloys go up and down completely randomly.
Pair Corralation between Asia Economy and Aloys
Assuming the 90 days trading horizon Asia Economy Daily is expected to generate 0.63 times more return on investment than Aloys. However, Asia Economy Daily is 1.58 times less risky than Aloys. It trades about -0.01 of its potential returns per unit of risk. Aloys Inc is currently generating about -0.04 per unit of risk. If you would invest 179,000 in Asia Economy Daily on September 12, 2024 and sell it today you would lose (30,000) from holding Asia Economy Daily or give up 16.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asia Economy Daily vs. Aloys Inc
Performance |
| Timeline |
| Asia Economy Daily |
| Aloys Inc |
Asia Economy and Aloys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Economy and Aloys
The main advantage of trading using opposite Asia Economy and Aloys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Economy position performs unexpectedly, Aloys 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 Aloys will offset losses from the drop in Aloys' long position.| Asia Economy vs. BooKook Steel Co | Asia Economy vs. Kaonmedia Co | Asia Economy vs. DB Insurance Co | Asia Economy vs. Kakao Games Corp |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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