Correlation Between Asia Green and Chow Steel
Can any of the company-specific risk be diversified away by investing in both Asia Green and Chow Steel 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 Chow Steel 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 Chow Steel Industries, you can compare the effects of market volatilities on Asia Green and Chow Steel 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 Chow Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Green and Chow Steel.
Diversification Opportunities for Asia Green and Chow Steel
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Asia and Chow is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Asia Green Energy and Chow Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chow Steel Industries 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 Chow Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chow Steel Industries has no effect on the direction of Asia Green i.e., Asia Green and Chow Steel go up and down completely randomly.
Pair Corralation between Asia Green and Chow Steel
Assuming the 90 days trading horizon Asia Green Energy is expected to generate 0.41 times more return on investment than Chow Steel. However, Asia Green Energy is 2.44 times less risky than Chow Steel. It trades about -0.47 of its potential returns per unit of risk. Chow Steel Industries is currently generating about -0.35 per unit of risk. If you would invest 136.00 in Asia Green Energy on September 4, 2024 and sell it today you would lose (12.00) from holding Asia Green Energy or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Green Energy vs. Chow Steel Industries
Performance |
| Timeline |
| Asia Green Energy |
| Chow Steel Industries |
Asia Green and Chow Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Green and Chow Steel
The main advantage of trading using opposite Asia Green and Chow Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Green position performs unexpectedly, Chow Steel 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 Chow Steel will offset losses from the drop in Chow Steel'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 |
| Chow Steel vs. Chewathai Public | Chow Steel vs. Cho Thavee Public | Chow Steel vs. ASIA Capital Group | Chow Steel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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