Correlation Between Asia Polymer and China Steel
Can any of the company-specific risk be diversified away by investing in both Asia Polymer and China Steel 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 China Steel 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 China Steel Chemical, you can compare the effects of market volatilities on Asia Polymer and China Steel 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 China Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Polymer and China Steel.
Diversification Opportunities for Asia Polymer and China Steel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Asia Polymer Corp and China Steel Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Steel 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 China Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Steel Chemical has no effect on the direction of Asia Polymer i.e., Asia Polymer and China Steel go up and down completely randomly.
Pair Corralation between Asia Polymer and China Steel
Assuming the 90 days trading horizon Asia Polymer Corp is expected to under-perform the China Steel. In addition to that, Asia Polymer is 2.66 times more volatile than China Steel Chemical. It trades about -0.01 of its total potential returns per unit of risk. China Steel Chemical is currently generating about 0.0 per unit of volatility. If you would invest 9,930 in China Steel Chemical on August 29, 2024 and sell it today you would lose (40.00) from holding China Steel Chemical or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Polymer Corp vs. China Steel Chemical
Performance |
| Timeline |
| Asia Polymer Corp |
| China Steel Chemical |
Asia Polymer and China Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Polymer and China Steel
The main advantage of trading using opposite Asia Polymer and China Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Polymer position performs unexpectedly, China Steel 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 China Steel will offset losses from the drop in China Steel'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 |
| China Steel vs. China Man Made Fiber | China Steel vs. USI Corp | China Steel vs. China Petrochemical Development | China Steel vs. Yulon 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world |