Correlation Between Asia Fiber and Boutique Newcity
Can any of the company-specific risk be diversified away by investing in both Asia Fiber and Boutique Newcity 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 Fiber and Boutique Newcity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Fiber Public and Boutique Newcity Public, you can compare the effects of market volatilities on Asia Fiber and Boutique Newcity 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 Fiber with a short position of Boutique Newcity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Fiber and Boutique Newcity.
Diversification Opportunities for Asia Fiber and Boutique Newcity
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asia and Boutique is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Asia Fiber Public and Boutique Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boutique Newcity Public and Asia Fiber 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 Fiber Public are associated (or correlated) with Boutique Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boutique Newcity Public has no effect on the direction of Asia Fiber i.e., Asia Fiber and Boutique Newcity go up and down completely randomly.
Pair Corralation between Asia Fiber and Boutique Newcity
Assuming the 90 days trading horizon Asia Fiber is expected to generate 1.19 times less return on investment than Boutique Newcity. But when comparing it to its historical volatility, Asia Fiber Public is 1.01 times less risky than Boutique Newcity. It trades about 0.04 of its potential returns per unit of risk. Boutique Newcity Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Boutique Newcity Public on November 6, 2024 and sell it today you would lose (10.00) from holding Boutique Newcity Public or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Fiber Public vs. Boutique Newcity Public
Performance |
| Timeline |
| Asia Fiber Public |
| Boutique Newcity Public |
Asia Fiber and Boutique Newcity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Fiber and Boutique Newcity
The main advantage of trading using opposite Asia Fiber and Boutique Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Fiber position performs unexpectedly, Boutique Newcity 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 Boutique Newcity will offset losses from the drop in Boutique Newcity's long position.| Asia Fiber vs. AJ Plast Public | Asia Fiber vs. Aikchol Hospital Public | Asia Fiber vs. Boutique Newcity Public | Asia Fiber vs. Allianz Ayudhya Capital |
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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 Stocks Directory module to find actively traded stocks across global markets.
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