Correlation Between Asia Green and East Coast
Can any of the company-specific risk be diversified away by investing in both Asia Green and East Coast 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 East Coast 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 East Coast Furnitech, you can compare the effects of market volatilities on Asia Green and East Coast 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 East Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Green and East Coast.
Diversification Opportunities for Asia Green and East Coast
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Asia and East is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Asia Green Energy and East Coast Furnitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Coast Furnitech 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 East Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Coast Furnitech has no effect on the direction of Asia Green i.e., Asia Green and East Coast go up and down completely randomly.
Pair Corralation between Asia Green and East Coast
Assuming the 90 days trading horizon Asia Green Energy is expected to generate 1.01 times more return on investment than East Coast. However, Asia Green is 1.01 times more volatile than East Coast Furnitech. It trades about 0.11 of its potential returns per unit of risk. East Coast Furnitech is currently generating about 0.11 per unit of risk. If you would invest 127.00 in Asia Green Energy on August 29, 2024 and sell it today you would lose (4.00) from holding Asia Green Energy or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Asia Green Energy vs. East Coast Furnitech
Performance |
| Timeline |
| Asia Green Energy |
| East Coast Furnitech |
Asia Green and East Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Green and East Coast
The main advantage of trading using opposite Asia Green and East Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Green position performs unexpectedly, East Coast 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 East Coast will offset losses from the drop in East Coast'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 |
| East Coast vs. G Capital Public | East Coast vs. E for L | East Coast vs. Filter Vision Public | East Coast vs. Chewathai 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |