Correlation Between Asian Alliance and I Tail
Can any of the company-specific risk be diversified away by investing in both Asian Alliance and I Tail 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 I Tail 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 i Tail Corp PCL, you can compare the effects of market volatilities on Asian Alliance and I Tail 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 I Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Alliance and I Tail.
Diversification Opportunities for Asian Alliance and I Tail
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Asian and ITC is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Asian Alliance International and i Tail Corp PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i Tail Corp 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 I Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i Tail Corp has no effect on the direction of Asian Alliance i.e., Asian Alliance and I Tail go up and down completely randomly.
Pair Corralation between Asian Alliance and I Tail
Assuming the 90 days trading horizon Asian Alliance International is expected to under-perform the I Tail. In addition to that, Asian Alliance is 1.38 times more volatile than i Tail Corp PCL. It trades about -0.07 of its total potential returns per unit of risk. i Tail Corp PCL is currently generating about -0.01 per unit of volatility. If you would invest 2,180 in i Tail Corp PCL on September 12, 2024 and sell it today you would lose (10.00) from holding i Tail Corp PCL or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asian Alliance International vs. i Tail Corp PCL
Performance |
| Timeline |
| Asian Alliance Inter |
| i Tail Corp |
Asian Alliance and I Tail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asian Alliance and I Tail
The main advantage of trading using opposite Asian Alliance and I Tail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asian Alliance position performs unexpectedly, I Tail 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 I Tail will offset losses from the drop in I Tail's long position.| Asian Alliance vs. i Tail Corp PCL | Asian Alliance vs. North East Rubbers | Asian Alliance vs. Thai Life Insurance | Asian Alliance vs. Exotic Food Public |
| I Tail vs. Delta Electronics Public | I Tail vs. Delta Electronics Public | I Tail vs. Airports of Thailand | I Tail vs. Airports of Thailand |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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