Correlation Between Yem Chio and Asia Polymer
Can any of the company-specific risk be diversified away by investing in both Yem Chio and Asia Polymer 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 Yem Chio and Asia Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yem Chio Co and Asia Polymer Corp, you can compare the effects of market volatilities on Yem Chio and Asia Polymer 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 Yem Chio with a short position of Asia Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yem Chio and Asia Polymer.
Diversification Opportunities for Yem Chio and Asia Polymer
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Yem and Asia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yem Chio Co and Asia Polymer Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Polymer Corp and Yem Chio 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 Yem Chio Co are associated (or correlated) with Asia Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Polymer Corp has no effect on the direction of Yem Chio i.e., Yem Chio and Asia Polymer go up and down completely randomly.
Pair Corralation between Yem Chio and Asia Polymer
Assuming the 90 days trading horizon Yem Chio Co is expected to under-perform the Asia Polymer. But the stock apears to be less risky and, when comparing its historical volatility, Yem Chio Co is 3.6 times less risky than Asia Polymer. The stock trades about -0.08 of its potential returns per unit of risk. The Asia Polymer Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,645 in Asia Polymer Corp on September 1, 2024 and sell it today you would lose (35.00) from holding Asia Polymer Corp or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yem Chio Co vs. Asia Polymer Corp
Performance |
| Timeline |
| Yem Chio |
| Asia Polymer Corp |
Yem Chio and Asia Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yem Chio and Asia Polymer
The main advantage of trading using opposite Yem Chio and Asia Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yem Chio position performs unexpectedly, Asia Polymer 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 Polymer will offset losses from the drop in Asia Polymer's long position.| Yem Chio vs. BES Engineering Co | Yem Chio vs. Continental Holdings Corp | Yem Chio vs. Kee Tai Properties | Yem Chio vs. Hung Sheng Construction |
| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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