Correlation Between Alliance Financial and Boustead Heavy
Can any of the company-specific risk be diversified away by investing in both Alliance Financial and Boustead Heavy 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 Alliance Financial and Boustead Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Financial Group and Boustead Heavy Industries, you can compare the effects of market volatilities on Alliance Financial and Boustead Heavy 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 Alliance Financial with a short position of Boustead Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Financial and Boustead Heavy.
Diversification Opportunities for Alliance Financial and Boustead Heavy
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alliance and Boustead is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Financial Group and Boustead Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boustead Heavy Industries and Alliance Financial 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 Alliance Financial Group are associated (or correlated) with Boustead Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boustead Heavy Industries has no effect on the direction of Alliance Financial i.e., Alliance Financial and Boustead Heavy go up and down completely randomly.
Pair Corralation between Alliance Financial and Boustead Heavy
Assuming the 90 days trading horizon Alliance Financial Group is expected to generate 0.43 times more return on investment than Boustead Heavy. However, Alliance Financial Group is 2.35 times less risky than Boustead Heavy. It trades about -0.06 of its potential returns per unit of risk. Boustead Heavy Industries is currently generating about -0.16 per unit of risk. If you would invest 522.00 in Alliance Financial Group on November 28, 2024 and sell it today you would lose (6.00) from holding Alliance Financial Group or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Financial Group vs. Boustead Heavy Industries
Performance |
| Timeline |
| Alliance Financial |
| Boustead Heavy Industries |
Alliance Financial and Boustead Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Financial and Boustead Heavy
The main advantage of trading using opposite Alliance Financial and Boustead Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Financial position performs unexpectedly, Boustead Heavy 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 Boustead Heavy will offset losses from the drop in Boustead Heavy's long position.| Alliance Financial vs. Apollo Food Holdings | Alliance Financial vs. Tex Cycle Technology | Alliance Financial vs. Petronas Chemicals Group | Alliance Financial vs. Carlsberg Brewery Malaysia |
| Boustead Heavy vs. Dnonce Tech Bhd | Boustead Heavy vs. DC HEALTHCARE HOLDINGS | Boustead Heavy vs. Genetec Technology Bhd | Boustead Heavy vs. Coraza Integrated Technology |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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