Correlation Between Asia Biomass and Alpha Divisions
Can any of the company-specific risk be diversified away by investing in both Asia Biomass and Alpha Divisions 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 Alpha Divisions 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 Alpha Divisions PCL, you can compare the effects of market volatilities on Asia Biomass and Alpha Divisions 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 Alpha Divisions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Biomass and Alpha Divisions.
Diversification Opportunities for Asia Biomass and Alpha Divisions
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Asia and Alpha is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Asia Biomass Public and Alpha Divisions PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Divisions PCL 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 Alpha Divisions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Divisions PCL has no effect on the direction of Asia Biomass i.e., Asia Biomass and Alpha Divisions go up and down completely randomly.
Pair Corralation between Asia Biomass and Alpha Divisions
Assuming the 90 days trading horizon Asia Biomass is expected to generate 1.03 times less return on investment than Alpha Divisions. But when comparing it to its historical volatility, Asia Biomass Public is 1.0 times less risky than Alpha Divisions. It trades about 0.04 of its potential returns per unit of risk. Alpha Divisions PCL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 82.00 in Alpha Divisions PCL on September 3, 2024 and sell it today you would lose (19.00) from holding Alpha Divisions PCL or give up 23.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Biomass Public vs. Alpha Divisions PCL
Performance |
| Timeline |
| Asia Biomass Public |
| Alpha Divisions PCL |
Asia Biomass and Alpha Divisions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Biomass and Alpha Divisions
The main advantage of trading using opposite Asia Biomass and Alpha Divisions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Biomass position performs unexpectedly, Alpha Divisions 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 Alpha Divisions will offset losses from the drop in Alpha Divisions' 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 |
| Alpha Divisions vs. Asia Biomass Public | Alpha Divisions vs. Akkhie Prakarn Public | Alpha Divisions vs. AIRA Factoring Public | Alpha Divisions vs. Infraset 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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