Correlation Between Asia Green and CAZ Public
Can any of the company-specific risk be diversified away by investing in both Asia Green and CAZ 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 CAZ 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 CAZ Public, you can compare the effects of market volatilities on Asia Green and CAZ 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 CAZ Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Green and CAZ Public.
Diversification Opportunities for Asia Green and CAZ Public
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asia and CAZ is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Asia Green Energy and CAZ Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAZ 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 CAZ Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAZ Public has no effect on the direction of Asia Green i.e., Asia Green and CAZ Public go up and down completely randomly.
Pair Corralation between Asia Green and CAZ Public
Assuming the 90 days trading horizon Asia Green is expected to generate 1.04 times less return on investment than CAZ Public. But when comparing it to its historical volatility, Asia Green Energy is 1.0 times less risky than CAZ Public. It trades about 0.04 of its potential returns per unit of risk. CAZ Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 334.00 in CAZ Public on November 28, 2024 and sell it today you would lose (138.00) from holding CAZ Public or give up 41.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Green Energy vs. CAZ Public
Performance |
| Timeline |
| Asia Green Energy |
| CAZ Public |
Asia Green and CAZ Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Green and CAZ Public
The main advantage of trading using opposite Asia Green and CAZ Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Green position performs unexpectedly, CAZ 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 CAZ Public will offset losses from the drop in CAZ Public's long position.| Asia Green vs. AP Public | Asia Green vs. Banpu Public | Asia Green vs. Chularat Hospital Public | Asia Green vs. Bangkok Chain Hospital |
| CAZ Public vs. Asia Green Energy | CAZ Public vs. Chularat Hospital Public | CAZ Public vs. AP Public | CAZ Public vs. Forth Smart Service |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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