Correlation Between Asia Commercial and KSD
Can any of the company-specific risk be diversified away by investing in both Asia Commercial and KSD 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 KSD 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 KSD, you can compare the effects of market volatilities on Asia Commercial and KSD 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 KSD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Commercial and KSD.
Diversification Opportunities for Asia Commercial and KSD
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and KSD is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Asia Commercial Bank and KSD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSD 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 KSD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSD has no effect on the direction of Asia Commercial i.e., Asia Commercial and KSD go up and down completely randomly.
Pair Corralation between Asia Commercial and KSD
Assuming the 90 days trading horizon Asia Commercial is expected to generate 5.0 times less return on investment than KSD. But when comparing it to its historical volatility, Asia Commercial Bank is 1.57 times less risky than KSD. It trades about 0.09 of its potential returns per unit of risk. KSD is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 470,000 in KSD on November 4, 2024 and sell it today you would earn a total of 20,000 from holding KSD or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.35% |
| Values | Daily Returns |
Asia Commercial Bank vs. KSD
Performance |
| Timeline |
| Asia Commercial Bank |
| KSD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Asia Commercial and KSD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Commercial and KSD
The main advantage of trading using opposite Asia Commercial and KSD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Commercial position performs unexpectedly, KSD 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 KSD will offset losses from the drop in KSD's long position.| Asia Commercial vs. Saigon Beer Alcohol | Asia Commercial vs. BIDV Insurance Corp | Asia Commercial vs. PetroVietnam Transportation Corp | Asia Commercial vs. Post and Telecommunications |
| KSD vs. Bao Ngoc Investment | KSD vs. Vietnam Rubber Group | KSD vs. Ben Thanh Rubber | KSD vs. Everland Investment JSC |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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