Correlation Between ASIA Capital and East Coast
Can any of the company-specific risk be diversified away by investing in both ASIA Capital and East Coast 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 Capital and East Coast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASIA Capital Group and East Coast Furnitech, you can compare the effects of market volatilities on ASIA Capital and East Coast 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 Capital with a short position of East Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASIA Capital and East Coast.
Diversification Opportunities for ASIA Capital and East Coast
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASIA and East is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ASIA Capital Group and East Coast Furnitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Coast Furnitech and ASIA Capital 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 Capital Group are associated (or correlated) with East Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Coast Furnitech has no effect on the direction of ASIA Capital i.e., ASIA Capital and East Coast go up and down completely randomly.
Pair Corralation between ASIA Capital and East Coast
Assuming the 90 days trading horizon ASIA Capital Group is expected to generate 1.42 times more return on investment than East Coast. However, ASIA Capital is 1.42 times more volatile than East Coast Furnitech. It trades about 0.1 of its potential returns per unit of risk. East Coast Furnitech is currently generating about 0.07 per unit of risk. If you would invest 33.00 in ASIA Capital Group on September 3, 2024 and sell it today you would lose (33.00) from holding ASIA Capital Group or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.37% |
| Values | Daily Returns |
ASIA Capital Group vs. East Coast Furnitech
Performance |
| Timeline |
| ASIA Capital Group |
| East Coast Furnitech |
ASIA Capital and East Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASIA Capital and East Coast
The main advantage of trading using opposite ASIA Capital and East Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASIA Capital position performs unexpectedly, East Coast 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 East Coast will offset losses from the drop in East Coast's long position.| ASIA Capital vs. Multibax Public | ASIA Capital vs. Forth Smart Service | ASIA Capital vs. LPN Development Public | ASIA Capital vs. Jasmine International Public |
| East Coast vs. G Capital Public | East Coast vs. E for L | East Coast vs. Filter Vision Public | East Coast vs. The Erawan 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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