Correlation Between Asia Metal and Chang Type
Can any of the company-specific risk be diversified away by investing in both Asia Metal and Chang Type 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 Asia Metal and Chang Type into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Metal Industries and Chang Type Industrial, you can compare the effects of market volatilities on Asia Metal and Chang Type 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 Asia Metal with a short position of Chang Type. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and Chang Type.
Diversification Opportunities for Asia Metal and Chang Type
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asia and Chang is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Industries and Chang Type Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chang Type Industrial and Asia 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 Asia Metal Industries are associated (or correlated) with Chang Type. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chang Type Industrial has no effect on the direction of Asia Metal i.e., Asia Metal and Chang Type go up and down completely randomly.
Pair Corralation between Asia Metal and Chang Type
Assuming the 90 days trading horizon Asia Metal Industries is expected to under-perform the Chang Type. But the stock apears to be less risky and, when comparing its historical volatility, Asia Metal Industries is 1.29 times less risky than Chang Type. The stock trades about -0.21 of its potential returns per unit of risk. The Chang Type Industrial is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 2,740 in Chang Type Industrial on October 25, 2024 and sell it today you would lose (125.00) from holding Chang Type Industrial or give up 4.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Metal Industries vs. Chang Type Industrial
Performance |
| Timeline |
| Asia Metal Industries |
| Chang Type Industrial |
Asia Metal and Chang Type Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and Chang Type
The main advantage of trading using opposite Asia Metal and Chang Type positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal position performs unexpectedly, Chang Type 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 Chang Type will offset losses from the drop in Chang Type's long position.| Asia Metal vs. Tainet Communication System | Asia Metal vs. Silicon Power Computer | Asia Metal vs. Fu Burg Industrial | Asia Metal vs. Dimension Computer Technology |
| Chang Type vs. Pacific Construction Co | Chang Type vs. WiseChip Semiconductor | Chang Type vs. ReaLy Development Construction | Chang Type vs. Mospec Semiconductor Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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