Correlation Between Asia Polymer and Yem Chio
Can any of the company-specific risk be diversified away by investing in both Asia Polymer and Yem Chio 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 Yem Chio 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 Yem Chio Co, you can compare the effects of market volatilities on Asia Polymer and Yem Chio 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 Yem Chio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Polymer and Yem Chio.
Diversification Opportunities for Asia Polymer and Yem Chio
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and Yem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Polymer Corp and Yem Chio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yem Chio 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 Yem Chio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yem Chio has no effect on the direction of Asia Polymer i.e., Asia Polymer and Yem Chio go up and down completely randomly.
Pair Corralation between Asia Polymer and Yem Chio
Assuming the 90 days trading horizon Asia Polymer Corp is expected to generate 2.16 times more return on investment than Yem Chio. However, Asia Polymer is 2.16 times more volatile than Yem Chio Co. It trades about 0.12 of its potential returns per unit of risk. Yem Chio Co is currently generating about 0.07 per unit of risk. If you would invest 1,400 in Asia Polymer Corp on November 6, 2024 and sell it today you would earn a total of 50.00 from holding Asia Polymer Corp or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Polymer Corp vs. Yem Chio Co
Performance |
| Timeline |
| Asia Polymer Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Yem Chio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asia Polymer and Yem Chio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Polymer and Yem Chio
The main advantage of trading using opposite Asia Polymer and Yem Chio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Polymer position performs unexpectedly, Yem Chio 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 Yem Chio will offset losses from the drop in Yem Chio's long position.The idea behind Asia Polymer Corp and Yem Chio Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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