Correlation Between Asia Commercial and IDJ FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Asia Commercial and IDJ FINANCIAL 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 Commercial and IDJ FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Commercial Bank and IDJ FINANCIAL, you can compare the effects of market volatilities on Asia Commercial and IDJ FINANCIAL 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 Commercial with a short position of IDJ FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Commercial and IDJ FINANCIAL.
Diversification Opportunities for Asia Commercial and IDJ FINANCIAL
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and IDJ is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Asia Commercial Bank and IDJ FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDJ FINANCIAL and Asia Commercial 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 Commercial Bank are associated (or correlated) with IDJ FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDJ FINANCIAL has no effect on the direction of Asia Commercial i.e., Asia Commercial and IDJ FINANCIAL go up and down completely randomly.
Pair Corralation between Asia Commercial and IDJ FINANCIAL
Assuming the 90 days trading horizon Asia Commercial Bank is expected to generate 0.45 times more return on investment than IDJ FINANCIAL. However, Asia Commercial Bank is 2.21 times less risky than IDJ FINANCIAL. It trades about 0.06 of its potential returns per unit of risk. IDJ FINANCIAL is currently generating about 0.0 per unit of risk. If you would invest 1,560,759 in Asia Commercial Bank on September 2, 2024 and sell it today you would earn a total of 959,241 from holding Asia Commercial Bank or generate 61.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Asia Commercial Bank vs. IDJ FINANCIAL
Performance |
| Timeline |
| Asia Commercial Bank |
| IDJ FINANCIAL |
Asia Commercial and IDJ FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Commercial and IDJ FINANCIAL
The main advantage of trading using opposite Asia Commercial and IDJ FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Commercial position performs unexpectedly, IDJ FINANCIAL 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 IDJ FINANCIAL will offset losses from the drop in IDJ FINANCIAL's long position.| Asia Commercial vs. FIT INVEST JSC | Asia Commercial vs. Damsan JSC | Asia Commercial vs. An Phat Plastic | Asia Commercial vs. Alphanam ME |
| IDJ FINANCIAL vs. FIT INVEST JSC | IDJ FINANCIAL vs. Damsan JSC | IDJ FINANCIAL vs. An Phat Plastic | IDJ FINANCIAL vs. Alphanam ME |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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