Correlation Between Hi Clearance and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Hi Clearance and Asia Metal 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 Hi Clearance and Asia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Clearance and Asia Metal Industries, you can compare the effects of market volatilities on Hi Clearance and Asia Metal 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 Hi Clearance with a short position of Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Clearance and Asia Metal.
Diversification Opportunities for Hi Clearance and Asia Metal
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 1788 and Asia is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hi Clearance and Asia Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Industries and Hi Clearance 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 Hi Clearance are associated (or correlated) with Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Industries has no effect on the direction of Hi Clearance i.e., Hi Clearance and Asia Metal go up and down completely randomly.
Pair Corralation between Hi Clearance and Asia Metal
Assuming the 90 days trading horizon Hi Clearance is expected to generate 13.72 times less return on investment than Asia Metal. But when comparing it to its historical volatility, Hi Clearance is 5.89 times less risky than Asia Metal. It trades about 0.04 of its potential returns per unit of risk. Asia Metal Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,820 in Asia Metal Industries on September 1, 2024 and sell it today you would earn a total of 1,980 from holding Asia Metal Industries or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Hi Clearance vs. Asia Metal Industries
Performance |
| Timeline |
| Hi Clearance |
| Asia Metal Industries |
Hi Clearance and Asia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Clearance and Asia Metal
The main advantage of trading using opposite Hi Clearance and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Clearance position performs unexpectedly, Asia Metal 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 Metal will offset losses from the drop in Asia Metal's long position.| Hi Clearance vs. ECOVE Environment Corp | Hi Clearance vs. Onyx Healthcare | Hi Clearance vs. Healthconn Corp | Hi Clearance vs. Wei Chih Steel |
| Asia Metal vs. Sunonwealth Electric Machine | Asia Metal vs. Rechi Precision Co | Asia Metal vs. Fittech Co | Asia Metal vs. C Sun Manufacturing |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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