Correlation Between Air Asia and SynCore Biotechnology
Can any of the company-specific risk be diversified away by investing in both Air Asia and SynCore Biotechnology 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 Air Asia and SynCore Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Asia Co and SynCore Biotechnology Co, you can compare the effects of market volatilities on Air Asia and SynCore Biotechnology 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 Air Asia with a short position of SynCore Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Asia and SynCore Biotechnology.
Diversification Opportunities for Air Asia and SynCore Biotechnology
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and SynCore is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Air Asia Co and SynCore Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SynCore Biotechnology and Air Asia 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 Air Asia Co are associated (or correlated) with SynCore Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SynCore Biotechnology has no effect on the direction of Air Asia i.e., Air Asia and SynCore Biotechnology go up and down completely randomly.
Pair Corralation between Air Asia and SynCore Biotechnology
Assuming the 90 days trading horizon Air Asia Co is expected to generate 2.03 times more return on investment than SynCore Biotechnology. However, Air Asia is 2.03 times more volatile than SynCore Biotechnology Co. It trades about 0.07 of its potential returns per unit of risk. SynCore Biotechnology Co is currently generating about -0.13 per unit of risk. If you would invest 3,110 in Air Asia Co on September 14, 2024 and sell it today you would earn a total of 110.00 from holding Air Asia Co or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Asia Co vs. SynCore Biotechnology Co
Performance |
| Timeline |
| Air Asia |
| SynCore Biotechnology |
Air Asia and SynCore Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Asia and SynCore Biotechnology
The main advantage of trading using opposite Air Asia and SynCore Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Asia position performs unexpectedly, SynCore Biotechnology 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 SynCore Biotechnology will offset losses from the drop in SynCore Biotechnology's long position.| Air Asia vs. Realtek Semiconductor Corp | Air Asia vs. Asmedia Technology | Air Asia vs. U Media Communications | Air Asia vs. U Tech Media Corp |
| SynCore Biotechnology vs. Ruentex Development Co | SynCore Biotechnology vs. Symtek Automation Asia | SynCore Biotechnology vs. WiseChip Semiconductor | SynCore Biotechnology vs. Novatek Microelectronics Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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