Correlation Between Eonmetall Group and AirAsia X
Can any of the company-specific risk be diversified away by investing in both Eonmetall Group and AirAsia X 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 Eonmetall Group and AirAsia X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eonmetall Group Bhd and AirAsia X Bhd, you can compare the effects of market volatilities on Eonmetall Group and AirAsia X 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 Eonmetall Group with a short position of AirAsia X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eonmetall Group and AirAsia X.
Diversification Opportunities for Eonmetall Group and AirAsia X
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eonmetall and AirAsia is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Eonmetall Group Bhd and AirAsia X Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirAsia X Bhd and Eonmetall Group 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 Eonmetall Group Bhd are associated (or correlated) with AirAsia X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirAsia X Bhd has no effect on the direction of Eonmetall Group i.e., Eonmetall Group and AirAsia X go up and down completely randomly.
Pair Corralation between Eonmetall Group and AirAsia X
Assuming the 90 days trading horizon Eonmetall Group Bhd is expected to generate 2.04 times more return on investment than AirAsia X. However, Eonmetall Group is 2.04 times more volatile than AirAsia X Bhd. It trades about -0.07 of its potential returns per unit of risk. AirAsia X Bhd is currently generating about -0.26 per unit of risk. If you would invest 30.00 in Eonmetall Group Bhd on October 22, 2024 and sell it today you would lose (2.00) from holding Eonmetall Group Bhd or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eonmetall Group Bhd vs. AirAsia X Bhd
Performance |
| Timeline |
| Eonmetall Group Bhd |
| AirAsia X Bhd |
Eonmetall Group and AirAsia X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eonmetall Group and AirAsia X
The main advantage of trading using opposite Eonmetall Group and AirAsia X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eonmetall Group position performs unexpectedly, AirAsia X 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 AirAsia X will offset losses from the drop in AirAsia X's long position.| Eonmetall Group vs. Tex Cycle Technology | Eonmetall Group vs. Lyc Healthcare Bhd | Eonmetall Group vs. Sungei Bagan Rubber | Eonmetall Group vs. Al Aqar Healthcare |
| AirAsia X vs. Eonmetall Group Bhd | AirAsia X vs. Awanbiru Technology Bhd | AirAsia X vs. Apollo Food Holdings | AirAsia X vs. Hong Leong Bank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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