Correlation Between Asia Aviation and Ananda Development
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Ananda Development 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 Aviation and Ananda Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Aviation Public and Ananda Development Public, you can compare the effects of market volatilities on Asia Aviation and Ananda Development 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 Aviation with a short position of Ananda Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Ananda Development.
Diversification Opportunities for Asia Aviation and Ananda Development
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asia and Ananda is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Ananda Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ananda Development Public and Asia Aviation 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 Aviation Public are associated (or correlated) with Ananda Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ananda Development Public has no effect on the direction of Asia Aviation i.e., Asia Aviation and Ananda Development go up and down completely randomly.
Pair Corralation between Asia Aviation and Ananda Development
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 1.0 times more return on investment than Ananda Development. However, Asia Aviation Public is 1.0 times less risky than Ananda Development. It trades about 0.06 of its potential returns per unit of risk. Ananda Development Public is currently generating about 0.06 per unit of risk. If you would invest 196.00 in Asia Aviation Public on August 25, 2024 and sell it today you would earn a total of 92.00 from holding Asia Aviation Public or generate 46.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Aviation Public vs. Ananda Development Public
Performance |
| Timeline |
| Asia Aviation Public |
| Ananda Development Public |
Asia Aviation and Ananda Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Ananda Development
The main advantage of trading using opposite Asia Aviation and Ananda Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Ananda Development 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 Ananda Development will offset losses from the drop in Ananda Development's long position.| Asia Aviation vs. Airports of Thailand | Asia Aviation vs. Bangkok Expressway and | Asia Aviation vs. BTS Group Holdings | Asia Aviation vs. Bangkok Airways Public |
| Ananda Development vs. WHA Public | Ananda Development vs. Supalai Public | Ananda Development vs. LPN Development 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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