Correlation Between Asia Commercial and Innovative Technology
Can any of the company-specific risk be diversified away by investing in both Asia Commercial and Innovative Technology 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 Innovative Technology 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 Innovative Technology Development, you can compare the effects of market volatilities on Asia Commercial and Innovative Technology 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 Innovative Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Commercial and Innovative Technology.
Diversification Opportunities for Asia Commercial and Innovative Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and Innovative is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asia Commercial Bank and Innovative Technology Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Technology 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 Innovative Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Technology has no effect on the direction of Asia Commercial i.e., Asia Commercial and Innovative Technology go up and down completely randomly.
Pair Corralation between Asia Commercial and Innovative Technology
Assuming the 90 days trading horizon Asia Commercial Bank is expected to generate 0.55 times more return on investment than Innovative Technology. However, Asia Commercial Bank is 1.83 times less risky than Innovative Technology. It trades about 0.02 of its potential returns per unit of risk. Innovative Technology Development is currently generating about -0.03 per unit of risk. If you would invest 2,435,000 in Asia Commercial Bank on September 3, 2024 and sell it today you would earn a total of 80,000 from holding Asia Commercial Bank or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Commercial Bank vs. Innovative Technology Developm
Performance |
| Timeline |
| Asia Commercial Bank |
| Innovative Technology |
Asia Commercial and Innovative Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Commercial and Innovative Technology
The main advantage of trading using opposite Asia Commercial and Innovative Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Commercial position performs unexpectedly, Innovative Technology 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 Innovative Technology will offset losses from the drop in Innovative Technology's long position.| Asia Commercial vs. Military Insurance Corp | Asia Commercial vs. Fecon Mining JSC | Asia Commercial vs. Agriculture Printing and | Asia Commercial vs. BaoMinh Insurance Corp |
| Innovative Technology vs. Hai An Transport | Innovative Technology vs. PetroVietnam Transportation Corp | Innovative Technology vs. Techno Agricultural Supplying | Innovative Technology vs. POST TELECOMMU |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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