Correlation Between Air Asia and V Tac
Can any of the company-specific risk be diversified away by investing in both Air Asia and V Tac 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 V Tac 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 V Tac Technology Co, you can compare the effects of market volatilities on Air Asia and V Tac 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 V Tac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Asia and V Tac.
Diversification Opportunities for Air Asia and V Tac
Very weak diversification
The 3 months correlation between Air and 6229 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Air Asia Co and V Tac Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Tac Technology 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 V Tac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Tac Technology has no effect on the direction of Air Asia i.e., Air Asia and V Tac go up and down completely randomly.
Pair Corralation between Air Asia and V Tac
Assuming the 90 days trading horizon Air Asia Co is expected to generate 1.14 times more return on investment than V Tac. However, Air Asia is 1.14 times more volatile than V Tac Technology Co. It trades about 0.06 of its potential returns per unit of risk. V Tac Technology Co is currently generating about 0.03 per unit of risk. If you would invest 1,528 in Air Asia Co on September 3, 2024 and sell it today you would earn a total of 1,502 from holding Air Asia Co or generate 98.3% 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. V Tac Technology Co
Performance |
| Timeline |
| Air Asia |
| V Tac Technology |
Air Asia and V Tac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Asia and V Tac
The main advantage of trading using opposite Air Asia and V Tac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Asia position performs unexpectedly, V Tac 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 V Tac will offset losses from the drop in V Tac's long position.| Air Asia vs. Eva Airways Corp | Air Asia vs. Taiwan High Speed | Air Asia vs. China Airlines | Air Asia vs. Formosa Plastics Corp |
| V Tac vs. Sitronix Technology Corp | V Tac vs. Kinsus Interconnect Technology | V Tac vs. WiseChip Semiconductor | V Tac 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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