Correlation Between Anderson Industrial and Asia Polymer
Can any of the company-specific risk be diversified away by investing in both Anderson Industrial and Asia Polymer 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 Anderson Industrial and Asia Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anderson Industrial Corp and Asia Polymer Corp, you can compare the effects of market volatilities on Anderson Industrial and Asia Polymer 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 Anderson Industrial with a short position of Asia Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anderson Industrial and Asia Polymer.
Diversification Opportunities for Anderson Industrial and Asia Polymer
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anderson and Asia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Anderson Industrial Corp and Asia Polymer Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Polymer Corp and Anderson Industrial 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 Anderson Industrial Corp are associated (or correlated) with Asia Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Polymer Corp has no effect on the direction of Anderson Industrial i.e., Anderson Industrial and Asia Polymer go up and down completely randomly.
Pair Corralation between Anderson Industrial and Asia Polymer
Assuming the 90 days trading horizon Anderson Industrial Corp is expected to generate 1.46 times more return on investment than Asia Polymer. However, Anderson Industrial is 1.46 times more volatile than Asia Polymer Corp. It trades about 0.27 of its potential returns per unit of risk. Asia Polymer Corp is currently generating about 0.13 per unit of risk. If you would invest 1,385 in Anderson Industrial Corp on November 28, 2024 and sell it today you would earn a total of 210.00 from holding Anderson Industrial Corp or generate 15.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Anderson Industrial Corp vs. Asia Polymer Corp
Performance |
| Timeline |
| Anderson Industrial Corp |
| Asia Polymer Corp |
Anderson Industrial and Asia Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anderson Industrial and Asia Polymer
The main advantage of trading using opposite Anderson Industrial and Asia Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anderson Industrial position performs unexpectedly, Asia Polymer 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 Asia Polymer will offset losses from the drop in Asia Polymer's long position.| Anderson Industrial vs. Awea Mechantronic Co | Anderson Industrial vs. Lee Chi Enterprises | Anderson Industrial vs. Kaulin Mfg | Anderson Industrial vs. Gordon Auto Body |
| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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