Correlation Between 2S Metal and Asia Medical

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Can any of the company-specific risk be diversified away by investing in both 2S Metal and Asia Medical 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 2S Metal and Asia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2S Metal Public and Asia Medical Agricultural, you can compare the effects of market volatilities on 2S Metal and Asia Medical 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 2S Metal with a short position of Asia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and Asia Medical.

Diversification Opportunities for 2S Metal and Asia Medical

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between 2S Metal and Asia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and Asia Medical Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Medical Agricultural and 2S Metal 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 2S Metal Public are associated (or correlated) with Asia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Medical Agricultural has no effect on the direction of 2S Metal i.e., 2S Metal and Asia Medical go up and down completely randomly.

Pair Corralation between 2S Metal and Asia Medical

Assuming the 90 days horizon 2S Metal Public is expected to under-perform the Asia Medical. But the stock apears to be less risky and, when comparing its historical volatility, 2S Metal Public is 1.84 times less risky than Asia Medical. The stock trades about -0.05 of its potential returns per unit of risk. The Asia Medical Agricultural is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  133.00  in Asia Medical Agricultural on September 2, 2024 and sell it today you would earn a total of  9.00  from holding Asia Medical Agricultural or generate 6.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

2S Metal Public  vs.  Asia Medical Agricultural

 Performance 
       Timeline  
2S Metal Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days 2S Metal Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, 2S Metal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Asia Medical Agricultural 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Asia Medical Agricultural are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Asia Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

2S Metal and Asia Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 2S Metal and Asia Medical

The main advantage of trading using opposite 2S Metal and Asia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, Asia Medical 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 Medical will offset losses from the drop in Asia Medical's long position.
The idea behind 2S Metal Public and Asia Medical Agricultural 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.
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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 Managers module to screen money managers from public funds and ETFs managed around the world.

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