Correlation Between Asia Green and BuilderSmart Public
Can any of the company-specific risk be diversified away by investing in both Asia Green and BuilderSmart Public 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 BuilderSmart Public 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 BuilderSmart Public, you can compare the effects of market volatilities on Asia Green and BuilderSmart Public 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 BuilderSmart Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Green and BuilderSmart Public.
Diversification Opportunities for Asia Green and BuilderSmart Public
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Asia and BuilderSmart is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Asia Green Energy and BuilderSmart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BuilderSmart Public 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 BuilderSmart Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BuilderSmart Public has no effect on the direction of Asia Green i.e., Asia Green and BuilderSmart Public go up and down completely randomly.
Pair Corralation between Asia Green and BuilderSmart Public
Assuming the 90 days trading horizon Asia Green is expected to generate 1.0 times less return on investment than BuilderSmart Public. In addition to that, Asia Green is 1.0 times more volatile than BuilderSmart Public. It trades about 0.05 of its total potential returns per unit of risk. BuilderSmart Public is currently generating about 0.05 per unit of volatility. If you would invest 262.00 in BuilderSmart Public on September 1, 2024 and sell it today you would lose (83.00) from holding BuilderSmart Public or give up 31.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Asia Green Energy vs. BuilderSmart Public
Performance |
| Timeline |
| Asia Green Energy |
| BuilderSmart Public |
Asia Green and BuilderSmart Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Green and BuilderSmart Public
The main advantage of trading using opposite Asia Green and BuilderSmart Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Green position performs unexpectedly, BuilderSmart Public 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 BuilderSmart Public will offset losses from the drop in BuilderSmart Public's long position.| Asia Green vs. Unimit Engineering Public | Asia Green vs. Union Petrochemical Public | Asia Green vs. Winner Group Enterprise | Asia Green vs. Ubis Public |
| BuilderSmart Public vs. Getabec Public | BuilderSmart Public vs. E for L | BuilderSmart Public vs. Salee Colour Public | BuilderSmart Public vs. CI Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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