Correlation Between Asia Metal and Hi Clearance
Can any of the company-specific risk be diversified away by investing in both Asia Metal and Hi Clearance 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 Hi Clearance 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 Hi Clearance, you can compare the effects of market volatilities on Asia Metal and Hi Clearance 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 Hi Clearance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and Hi Clearance.
Diversification Opportunities for Asia Metal and Hi Clearance
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and 1788 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Industries and Hi Clearance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Clearance 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 Hi Clearance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Clearance has no effect on the direction of Asia Metal i.e., Asia Metal and Hi Clearance go up and down completely randomly.
Pair Corralation between Asia Metal and Hi Clearance
Assuming the 90 days trading horizon Asia Metal Industries is expected to generate 3.62 times more return on investment than Hi Clearance. However, Asia Metal is 3.62 times more volatile than Hi Clearance. It trades about 0.05 of its potential returns per unit of risk. Hi Clearance is currently generating about 0.03 per unit of risk. If you would invest 6,588 in Asia Metal Industries on September 1, 2024 and sell it today you would earn a total of 2,212 from holding Asia Metal Industries or generate 33.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Asia Metal Industries vs. Hi Clearance
Performance |
| Timeline |
| Asia Metal Industries |
| Hi Clearance |
Asia Metal and Hi Clearance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and Hi Clearance
The main advantage of trading using opposite Asia Metal and Hi Clearance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal position performs unexpectedly, Hi Clearance 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 Hi Clearance will offset losses from the drop in Hi Clearance's long position.| Asia Metal vs. Sunonwealth Electric Machine | Asia Metal vs. Rechi Precision Co | Asia Metal vs. Fittech Co | Asia Metal vs. C Sun Manufacturing |
| Hi Clearance vs. ECOVE Environment Corp | Hi Clearance vs. Onyx Healthcare | Hi Clearance vs. Healthconn Corp | Hi Clearance vs. Wei Chih Steel |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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