Correlation Between Asia Aviation and Techno Medical
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Techno Medical 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 Techno Medical 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 Techno Medical Public, you can compare the effects of market volatilities on Asia Aviation and Techno Medical 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 Techno Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Techno Medical.
Diversification Opportunities for Asia Aviation and Techno Medical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and Techno is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Techno Medical Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techno Medical 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 Techno Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techno Medical Public has no effect on the direction of Asia Aviation i.e., Asia Aviation and Techno Medical go up and down completely randomly.
Pair Corralation between Asia Aviation and Techno Medical
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 1.0 times more return on investment than Techno Medical. However, Asia Aviation Public is 1.0 times less risky than Techno Medical. It trades about 0.04 of its potential returns per unit of risk. Techno Medical Public is currently generating about 0.04 per unit of risk. If you would invest 292.00 in Asia Aviation Public on September 5, 2024 and sell it today you would lose (6.00) from holding Asia Aviation Public or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asia Aviation Public vs. Techno Medical Public
Performance |
| Timeline |
| Asia Aviation Public |
| Techno Medical Public |
Asia Aviation and Techno Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Techno Medical
The main advantage of trading using opposite Asia Aviation and Techno Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Techno Medical 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 Techno Medical will offset losses from the drop in Techno Medical'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 |
| Techno Medical vs. Asia Aviation Public | Techno Medical vs. Bangkok Dusit Medical | Techno Medical vs. Bangkok Expressway and | Techno Medical 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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