Correlation Between Asian Alliance and Aqua Public
Can any of the company-specific risk be diversified away by investing in both Asian Alliance and Aqua Public 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 Asian Alliance and Aqua Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asian Alliance International and Aqua Public, you can compare the effects of market volatilities on Asian Alliance and Aqua Public 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 Asian Alliance with a short position of Aqua Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Alliance and Aqua Public.
Diversification Opportunities for Asian Alliance and Aqua Public
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asian and Aqua is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Asian Alliance International and Aqua Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Public and Asian Alliance 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 Asian Alliance International are associated (or correlated) with Aqua Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Public has no effect on the direction of Asian Alliance i.e., Asian Alliance and Aqua Public go up and down completely randomly.
Pair Corralation between Asian Alliance and Aqua Public
Assuming the 90 days trading horizon Asian Alliance is expected to generate 73.78 times less return on investment than Aqua Public. But when comparing it to its historical volatility, Asian Alliance International is 40.48 times less risky than Aqua Public. It trades about 0.05 of its potential returns per unit of risk. Aqua Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Aqua Public on September 5, 2024 and sell it today you would lose (3.00) from holding Aqua Public or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Asian Alliance International vs. Aqua Public
Performance |
| Timeline |
| Asian Alliance Inter |
| Aqua Public |
Asian Alliance and Aqua Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asian Alliance and Aqua Public
The main advantage of trading using opposite Asian Alliance and Aqua Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asian Alliance position performs unexpectedly, Aqua Public 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 Aqua Public will offset losses from the drop in Aqua Public's long position.| Asian Alliance vs. Kingsmen CMTI Public | Asian Alliance vs. Hydrotek Public | Asian Alliance vs. Karmarts Public | Asian Alliance vs. KC Metalsheet Public |
| Aqua Public vs. SRI TRANG GLOVES | Aqua Public vs. AEON Thana Sinsap | Aqua Public vs. Asian Alliance International | Aqua Public vs. Sikarin Public |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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