Correlation Between Asia Carbon and Lhyfe SA
Can any of the company-specific risk be diversified away by investing in both Asia Carbon and Lhyfe SA 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 Carbon and Lhyfe SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Carbon Industries and Lhyfe SA, you can compare the effects of market volatilities on Asia Carbon and Lhyfe SA 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 Carbon with a short position of Lhyfe SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Carbon and Lhyfe SA.
Diversification Opportunities for Asia Carbon and Lhyfe SA
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Asia and Lhyfe is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Carbon Industries and Lhyfe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lhyfe SA and Asia Carbon 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 Carbon Industries are associated (or correlated) with Lhyfe SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lhyfe SA has no effect on the direction of Asia Carbon i.e., Asia Carbon and Lhyfe SA go up and down completely randomly.
Pair Corralation between Asia Carbon and Lhyfe SA
If you would invest 0.01 in Asia Carbon Industries on December 2, 2024 and sell it today you would earn a total of 0.00 from holding Asia Carbon Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 96.36% |
| Values | Daily Returns |
Asia Carbon Industries vs. Lhyfe SA
Performance |
| Timeline |
| Asia Carbon Industries |
| Lhyfe SA |
Asia Carbon and Lhyfe SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Carbon and Lhyfe SA
The main advantage of trading using opposite Asia Carbon and Lhyfe SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Carbon position performs unexpectedly, Lhyfe SA 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 Lhyfe SA will offset losses from the drop in Lhyfe SA's long position.| Asia Carbon vs. Avoca LLC | ||
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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