Correlation Between AirAsia X and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both AirAsia X and Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd, you can compare the effects of market volatilities on AirAsia X and Resintech Bhd 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirAsia X and Resintech Bhd.
Diversification Opportunities for AirAsia X and Resintech Bhd
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between AirAsia and Resintech is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AirAsia X Bhd and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech Bhd 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of AirAsia X i.e., AirAsia X and Resintech Bhd go up and down completely randomly.
Pair Corralation between AirAsia X and Resintech Bhd
Assuming the 90 days trading horizon AirAsia X Bhd is expected to under-perform the Resintech Bhd. In addition to that, AirAsia X is 1.49 times more volatile than Resintech Bhd. It trades about -0.2 of its total potential returns per unit of risk. Resintech Bhd is currently generating about -0.24 per unit of volatility. If you would invest 75.00 in Resintech Bhd on November 8, 2024 and sell it today you would lose (6.00) from holding Resintech Bhd or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AirAsia X Bhd vs. Resintech Bhd
Performance |
| Timeline |
| AirAsia X Bhd |
| Resintech Bhd |
AirAsia X and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AirAsia X and Resintech Bhd
The main advantage of trading using opposite AirAsia X and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AirAsia X position performs unexpectedly, Resintech Bhd 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| AirAsia X vs. Malayan Banking Bhd | AirAsia X vs. Public Bank Bhd | AirAsia X vs. Petronas Chemicals Group | AirAsia X vs. Tenaga Nasional Bhd |
| Resintech Bhd vs. Genetec Technology Bhd | Resintech Bhd vs. Apollo Food Holdings | Resintech Bhd vs. JAKS Resources Bhd | Resintech Bhd vs. Uwc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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