Correlation Between AirAsia X and YX Precious
Can any of the company-specific risk be diversified away by investing in both AirAsia X and YX Precious 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 AirAsia X and YX Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AirAsia X Bhd and YX Precious Metals, you can compare the effects of market volatilities on AirAsia X and YX Precious 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 AirAsia X with a short position of YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirAsia X and YX Precious.
Diversification Opportunities for AirAsia X and YX Precious
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AirAsia and 0250 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AirAsia X Bhd and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals and AirAsia X 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 AirAsia X Bhd are associated (or correlated) with YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of AirAsia X i.e., AirAsia X and YX Precious go up and down completely randomly.
Pair Corralation between AirAsia X and YX Precious
Assuming the 90 days trading horizon AirAsia X Bhd is expected to generate 1.28 times more return on investment than YX Precious. However, AirAsia X is 1.28 times more volatile than YX Precious Metals. It trades about 0.07 of its potential returns per unit of risk. YX Precious Metals is currently generating about -0.02 per unit of risk. If you would invest 133.00 in AirAsia X Bhd on October 25, 2024 and sell it today you would earn a total of 49.00 from holding AirAsia X Bhd or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AirAsia X Bhd vs. YX Precious Metals
Performance |
| Timeline |
| AirAsia X Bhd |
| YX Precious Metals |
AirAsia X and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AirAsia X and YX Precious
The main advantage of trading using opposite AirAsia X and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AirAsia X position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| AirAsia X vs. Greatech Technology Bhd | AirAsia X vs. TAS Offshore Bhd | AirAsia X vs. YX Precious Metals | AirAsia X vs. British American Tobacco |
| YX Precious vs. Kawan Food Bhd | YX Precious vs. Leader Steel Holdings | YX Precious vs. Lysaght Galvanized Steel | YX Precious vs. K One Technology Bhd |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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