Correlation Between Asia Biomass and AIRA Factoring
Can any of the company-specific risk be diversified away by investing in both Asia Biomass and AIRA Factoring 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 AIRA Factoring 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 AIRA Factoring Public, you can compare the effects of market volatilities on Asia Biomass and AIRA Factoring 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 AIRA Factoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Biomass and AIRA Factoring.
Diversification Opportunities for Asia Biomass and AIRA Factoring
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and AIRA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Asia Biomass Public and AIRA Factoring Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRA Factoring Public 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 AIRA Factoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRA Factoring Public has no effect on the direction of Asia Biomass i.e., Asia Biomass and AIRA Factoring go up and down completely randomly.
Pair Corralation between Asia Biomass and AIRA Factoring
Assuming the 90 days trading horizon Asia Biomass Public is expected to generate 12.82 times more return on investment than AIRA Factoring. However, Asia Biomass is 12.82 times more volatile than AIRA Factoring Public. It trades about 0.04 of its potential returns per unit of risk. AIRA Factoring Public is currently generating about -0.01 per unit of risk. If you would invest 195.00 in Asia Biomass Public on September 3, 2024 and sell it today you would lose (65.00) from holding Asia Biomass Public or give up 33.33% 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. AIRA Factoring Public
Performance |
| Timeline |
| Asia Biomass Public |
| AIRA Factoring Public |
Asia Biomass and AIRA Factoring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Biomass and AIRA Factoring
The main advantage of trading using opposite Asia Biomass and AIRA Factoring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Biomass position performs unexpectedly, AIRA Factoring 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 AIRA Factoring will offset losses from the drop in AIRA Factoring'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 |
| AIRA Factoring vs. Akkhie Prakarn Public | AIRA Factoring vs. Asia Green Energy | AIRA Factoring vs. G Capital Public | AIRA Factoring 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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