Correlation Between Airtac International and Yeong Guan
Can any of the company-specific risk be diversified away by investing in both Airtac International and Yeong Guan 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 Airtac International and Yeong Guan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airtac International Group and Yeong Guan Energy, you can compare the effects of market volatilities on Airtac International and Yeong Guan 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 Airtac International with a short position of Yeong Guan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtac International and Yeong Guan.
Diversification Opportunities for Airtac International and Yeong Guan
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Airtac and Yeong is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Airtac International Group and Yeong Guan Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yeong Guan Energy and Airtac International 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 Airtac International Group are associated (or correlated) with Yeong Guan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yeong Guan Energy has no effect on the direction of Airtac International i.e., Airtac International and Yeong Guan go up and down completely randomly.
Pair Corralation between Airtac International and Yeong Guan
Assuming the 90 days trading horizon Airtac International is expected to generate 2.32 times less return on investment than Yeong Guan. In addition to that, Airtac International is 1.23 times more volatile than Yeong Guan Energy. It trades about 0.1 of its total potential returns per unit of risk. Yeong Guan Energy is currently generating about 0.29 per unit of volatility. If you would invest 3,435 in Yeong Guan Energy on November 4, 2024 and sell it today you would earn a total of 235.00 from holding Yeong Guan Energy or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airtac International Group vs. Yeong Guan Energy
Performance |
| Timeline |
| Airtac International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Yeong Guan Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Airtac International and Yeong Guan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airtac International and Yeong Guan
The main advantage of trading using opposite Airtac International and Yeong Guan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airtac International position performs unexpectedly, Yeong Guan 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 Yeong Guan will offset losses from the drop in Yeong Guan's long position.The idea behind Airtac International Group and Yeong Guan Energy 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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