Correlation Between Asia Green and Asia Plus
Can any of the company-specific risk be diversified away by investing in both Asia Green and Asia Plus 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 Green and Asia Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Green Energy and Asia Plus Group, you can compare the effects of market volatilities on Asia Green and Asia Plus 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 Green with a short position of Asia Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Green and Asia Plus.
Diversification Opportunities for Asia Green and Asia Plus
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Asia and Asia is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Asia Green Energy and Asia Plus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Plus Group and Asia Green 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 Green Energy are associated (or correlated) with Asia Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Plus Group has no effect on the direction of Asia Green i.e., Asia Green and Asia Plus go up and down completely randomly.
Pair Corralation between Asia Green and Asia Plus
Assuming the 90 days trading horizon Asia Green Energy is expected to generate 53.51 times more return on investment than Asia Plus. However, Asia Green is 53.51 times more volatile than Asia Plus Group. It trades about 0.06 of its potential returns per unit of risk. Asia Plus Group is currently generating about -0.04 per unit of risk. If you would invest 181.00 in Asia Green Energy on November 4, 2024 and sell it today you would lose (64.00) from holding Asia Green Energy or give up 35.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Green Energy vs. Asia Plus Group
Performance |
| Timeline |
| Asia Green Energy |
| Asia Plus Group |
Asia Green and Asia Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Green and Asia Plus
The main advantage of trading using opposite Asia Green and Asia Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Green position performs unexpectedly, Asia Plus 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 Asia Plus will offset losses from the drop in Asia Plus' long position.| Asia Green vs. AP Public | Asia Green vs. Banpu Public | Asia Green vs. Chularat Hospital Public | Asia Green vs. Bangkok Chain Hospital |
| Asia Plus vs. KGI Securities Public | Asia Plus vs. Bangkok Bank Public | Asia Plus vs. Land and Houses | Asia Plus vs. Italian Thai Development Public |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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