Correlation Between Asia Aviation and Better World
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Better World 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 Better World 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 Better World Green, you can compare the effects of market volatilities on Asia Aviation and Better World 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 Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Better World.
Diversification Opportunities for Asia Aviation and Better World
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and Better is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Better World Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Green 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 Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Green has no effect on the direction of Asia Aviation i.e., Asia Aviation and Better World go up and down completely randomly.
Pair Corralation between Asia Aviation and Better World
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 13.18 times more return on investment than Better World. However, Asia Aviation is 13.18 times more volatile than Better World Green. It trades about 0.04 of its potential returns per unit of risk. Better World Green is currently generating about -0.02 per unit of risk. If you would invest 304.00 in Asia Aviation Public on August 30, 2024 and sell it today you would lose (26.00) from holding Asia Aviation Public or give up 8.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Aviation Public vs. Better World Green
Performance |
| Timeline |
| Asia Aviation Public |
| Better World Green |
Asia Aviation and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Better World
The main advantage of trading using opposite Asia Aviation and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| Asia Aviation vs. MCS Steel Public | Asia Aviation vs. Asia Plus Group | Asia Aviation vs. Lalin Property Public | Asia Aviation vs. Lam Soon Public |
| Better World vs. Beauty Community Public | Better World vs. Demco Public | Better World vs. Asia Aviation Public | Better World vs. CK Power 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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