Correlation Between Asia Polymer and San Fang
Can any of the company-specific risk be diversified away by investing in both Asia Polymer and San Fang 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 Polymer and San Fang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Polymer Corp and San Fang Chemical, you can compare the effects of market volatilities on Asia Polymer and San Fang 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 Polymer with a short position of San Fang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Polymer and San Fang.
Diversification Opportunities for Asia Polymer and San Fang
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and San is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Asia Polymer Corp and San Fang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Fang Chemical and Asia Polymer 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 Polymer Corp are associated (or correlated) with San Fang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Fang Chemical has no effect on the direction of Asia Polymer i.e., Asia Polymer and San Fang go up and down completely randomly.
Pair Corralation between Asia Polymer and San Fang
Assuming the 90 days trading horizon Asia Polymer Corp is expected to generate 1.26 times more return on investment than San Fang. However, Asia Polymer is 1.26 times more volatile than San Fang Chemical. It trades about -0.01 of its potential returns per unit of risk. San Fang Chemical is currently generating about -0.17 per unit of risk. If you would invest 1,645 in Asia Polymer Corp on September 1, 2024 and sell it today you would lose (35.00) from holding Asia Polymer Corp or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Asia Polymer Corp vs. San Fang Chemical
Performance |
| Timeline |
| Asia Polymer Corp |
| San Fang Chemical |
Asia Polymer and San Fang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Polymer and San Fang
The main advantage of trading using opposite Asia Polymer and San Fang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Polymer position performs unexpectedly, San Fang 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 San Fang will offset losses from the drop in San Fang's long position.| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
| San Fang vs. Asia Polymer Corp | San Fang vs. Taiwan Styrene Monomer | San Fang vs. UPC Technology Corp | San Fang vs. USI Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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