Correlation Between Asia Metal and Sirtec International
Can any of the company-specific risk be diversified away by investing in both Asia Metal and Sirtec International 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 Sirtec International 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 Sirtec International Co, you can compare the effects of market volatilities on Asia Metal and Sirtec International 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 Sirtec International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and Sirtec International.
Diversification Opportunities for Asia Metal and Sirtec International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Sirtec is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Industries and Sirtec International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirtec International 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 Sirtec International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirtec International has no effect on the direction of Asia Metal i.e., Asia Metal and Sirtec International go up and down completely randomly.
Pair Corralation between Asia Metal and Sirtec International
Assuming the 90 days trading horizon Asia Metal Industries is expected to generate 1.71 times more return on investment than Sirtec International. However, Asia Metal is 1.71 times more volatile than Sirtec International Co. It trades about -0.09 of its potential returns per unit of risk. Sirtec International Co is currently generating about -0.25 per unit of risk. If you would invest 8,610 in Asia Metal Industries on October 23, 2024 and sell it today you would lose (640.00) from holding Asia Metal Industries or give up 7.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Asia Metal Industries vs. Sirtec International Co
Performance |
| Timeline |
| Asia Metal Industries |
| Sirtec International |
Asia Metal and Sirtec International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and Sirtec International
The main advantage of trading using opposite Asia Metal and Sirtec International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal position performs unexpectedly, Sirtec International 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 Sirtec International will offset losses from the drop in Sirtec International's long position.| Asia Metal vs. Hannstar Display Corp | Asia Metal vs. Genovate Biotechnology Co | Asia Metal vs. Far EasTone Telecommunications | Asia Metal vs. Sunmax Biotechnology Co |
| Sirtec International vs. Camellia Metal Co | Sirtec International vs. Asia Metal Industries | Sirtec International vs. Shinkong Insurance Co | Sirtec International vs. First Hotel Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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