Correlation Between Asia Metal and Chernan Metal
Can any of the company-specific risk be diversified away by investing in both Asia Metal and Chernan 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 Asia Metal and Chernan Metal 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 Chernan Metal Industrial, you can compare the effects of market volatilities on Asia Metal and Chernan 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 Asia Metal with a short position of Chernan Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and Chernan Metal.
Diversification Opportunities for Asia Metal and Chernan Metal
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and Chernan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Industries and Chernan Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chernan Metal 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 Chernan Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chernan Metal Industrial has no effect on the direction of Asia Metal i.e., Asia Metal and Chernan Metal go up and down completely randomly.
Pair Corralation between Asia Metal and Chernan Metal
Assuming the 90 days trading horizon Asia Metal Industries is expected to generate 1.43 times more return on investment than Chernan Metal. However, Asia Metal is 1.43 times more volatile than Chernan Metal Industrial. It trades about 0.11 of its potential returns per unit of risk. Chernan Metal Industrial is currently generating about -0.11 per unit of risk. If you would invest 8,300 in Asia Metal Industries on August 28, 2024 and sell it today you would earn a total of 600.00 from holding Asia Metal Industries or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Metal Industries vs. Chernan Metal Industrial
Performance |
| Timeline |
| Asia Metal Industries |
| Chernan Metal Industrial |
Asia Metal and Chernan Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and Chernan Metal
The main advantage of trading using opposite Asia Metal and Chernan Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal position performs unexpectedly, Chernan 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 Chernan Metal will offset losses from the drop in Chernan Metal's long position.| Asia Metal vs. Golden Friends | Asia Metal vs. Sunonwealth Electric Machine | Asia Metal vs. Rechi Precision Co | Asia Metal vs. C Sun Manufacturing |
| Chernan Metal vs. Evergreen Steel Corp | Chernan Metal vs. Apex Biotechnology Corp | Chernan Metal vs. Yeou Yih Steel | Chernan Metal vs. Tang Eng Iron |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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