Correlation Between Asia Biomass and Asset Five
Can any of the company-specific risk be diversified away by investing in both Asia Biomass and Asset Five 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 Biomass and Asset Five into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Biomass Public and Asset Five Group, you can compare the effects of market volatilities on Asia Biomass and Asset Five 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 Biomass with a short position of Asset Five. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Biomass and Asset Five.
Diversification Opportunities for Asia Biomass and Asset Five
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asia and Asset is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Asia Biomass Public and Asset Five Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asset Five Group and Asia Biomass 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 Biomass Public are associated (or correlated) with Asset Five. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asset Five Group has no effect on the direction of Asia Biomass i.e., Asia Biomass and Asset Five go up and down completely randomly.
Pair Corralation between Asia Biomass and Asset Five
Assuming the 90 days trading horizon Asia Biomass Public is expected to generate 1.0 times more return on investment than Asset Five. However, Asia Biomass Public is 1.0 times less risky than Asset Five. It trades about 0.05 of its potential returns per unit of risk. Asset Five Group is currently generating about 0.05 per unit of risk. If you would invest 139.00 in Asia Biomass Public on September 12, 2024 and sell it today you would lose (9.00) from holding Asia Biomass Public or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Biomass Public vs. Asset Five Group
Performance |
| Timeline |
| Asia Biomass Public |
| Asset Five Group |
Asia Biomass and Asset Five Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Biomass and Asset Five
The main advantage of trading using opposite Asia Biomass and Asset Five positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Biomass position performs unexpectedly, Asset Five 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 Asset Five will offset losses from the drop in Asset Five's long position.| Asia Biomass vs. Akkhie Prakarn Public | Asia Biomass vs. AIRA Factoring Public | Asia Biomass vs. G Capital Public | Asia Biomass vs. Asia Green Energy |
| Asset Five vs. AIRA Factoring Public | Asset Five vs. Applied DB Public | Asset Five vs. Asia Biomass Public | Asset Five vs. ASIA Capital Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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