Correlation Between Asia Commercial and Sea Air
Can any of the company-specific risk be diversified away by investing in both Asia Commercial and Sea Air 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 Sea Air 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 Sea Air Freight, you can compare the effects of market volatilities on Asia Commercial and Sea Air 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 Sea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Commercial and Sea Air.
Diversification Opportunities for Asia Commercial and Sea Air
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Sea is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Asia Commercial Bank and Sea Air Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Air Freight 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 Sea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Air Freight has no effect on the direction of Asia Commercial i.e., Asia Commercial and Sea Air go up and down completely randomly.
Pair Corralation between Asia Commercial and Sea Air
Assuming the 90 days trading horizon Asia Commercial Bank is expected to generate 0.64 times more return on investment than Sea Air. However, Asia Commercial Bank is 1.56 times less risky than Sea Air. It trades about -0.1 of its potential returns per unit of risk. Sea Air Freight is currently generating about -0.2 per unit of risk. If you would invest 2,540,000 in Asia Commercial Bank on August 24, 2024 and sell it today you would lose (55,000) from holding Asia Commercial Bank or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
Asia Commercial Bank vs. Sea Air Freight
Performance |
| Timeline |
| Asia Commercial Bank |
| Sea Air Freight |
Asia Commercial and Sea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Commercial and Sea Air
The main advantage of trading using opposite Asia Commercial and Sea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Commercial position performs unexpectedly, Sea Air 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 Sea Air will offset losses from the drop in Sea Air's long position.| Asia Commercial vs. Riverway Management JSC | Asia Commercial vs. Taseco Air Services | Asia Commercial vs. Post and Telecommunications | Asia Commercial vs. FPT Digital Retail |
| Sea Air vs. FIT INVEST JSC | Sea Air vs. Damsan JSC | Sea Air vs. An Phat Plastic | Sea Air vs. APG Securities Joint |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |