Correlation Between Grand Ocean and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Grand Ocean and Asia Metal 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 Grand Ocean and Asia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and Asia Metal Industries, you can compare the effects of market volatilities on Grand Ocean and Asia Metal 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 Grand Ocean with a short position of Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Asia Metal.
Diversification Opportunities for Grand Ocean and Asia Metal
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grand and Asia is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Asia Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Industries and Grand Ocean 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 Grand Ocean Retail are associated (or correlated) with Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Industries has no effect on the direction of Grand Ocean i.e., Grand Ocean and Asia Metal go up and down completely randomly.
Pair Corralation between Grand Ocean and Asia Metal
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the Asia Metal. In addition to that, Grand Ocean is 1.58 times more volatile than Asia Metal Industries. It trades about -0.46 of its total potential returns per unit of risk. Asia Metal Industries is currently generating about -0.04 per unit of volatility. If you would invest 8,280 in Asia Metal Industries on October 14, 2024 and sell it today you would lose (110.00) from holding Asia Metal Industries or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. Asia Metal Industries
Performance |
| Timeline |
| Grand Ocean Retail |
| Asia Metal Industries |
Grand Ocean and Asia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and Asia Metal
The main advantage of trading using opposite Grand Ocean and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, Asia Metal 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 Metal will offset losses from the drop in Asia Metal's long position.| Grand Ocean vs. First Steamship Co | Grand Ocean vs. Far Eastern Department | Grand Ocean vs. LongDa Construction Development | Grand Ocean vs. Collins Co |
| Asia Metal vs. Medigen Biotechnology | Asia Metal vs. Grand Ocean Retail | Asia Metal vs. Excelsior Medical Co | Asia Metal vs. Golden Biotechnology |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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