Correlation Between Asahi Kasei and Flameret
Can any of the company-specific risk be diversified away by investing in both Asahi Kasei and Flameret 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 Asahi Kasei and Flameret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asahi Kasei and Flameret, you can compare the effects of market volatilities on Asahi Kasei and Flameret 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 Asahi Kasei with a short position of Flameret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asahi Kasei and Flameret.
Diversification Opportunities for Asahi Kasei and Flameret
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asahi and Flameret is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Asahi Kasei and Flameret in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flameret and Asahi Kasei 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 Asahi Kasei are associated (or correlated) with Flameret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flameret has no effect on the direction of Asahi Kasei i.e., Asahi Kasei and Flameret go up and down completely randomly.
Pair Corralation between Asahi Kasei and Flameret
Assuming the 90 days horizon Asahi Kasei is expected to generate 0.18 times more return on investment than Flameret. However, Asahi Kasei is 5.59 times less risky than Flameret. It trades about 0.05 of its potential returns per unit of risk. Flameret is currently generating about -0.03 per unit of risk. If you would invest 680.00 in Asahi Kasei on November 3, 2024 and sell it today you would earn a total of 80.00 from holding Asahi Kasei or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 54.22% |
| Values | Daily Returns |
Asahi Kasei vs. Flameret
Performance |
| Timeline |
| Asahi Kasei |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Flameret |
Asahi Kasei and Flameret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asahi Kasei and Flameret
The main advantage of trading using opposite Asahi Kasei and Flameret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asahi Kasei position performs unexpectedly, Flameret 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 Flameret will offset losses from the drop in Flameret's long position.| Asahi Kasei vs. Altech Batteries Limited | Asahi Kasei vs. Alumifuel Pwr Corp | Asahi Kasei vs. Shin Etsu Chemical Co | Asahi Kasei vs. ASP Isotopes Common |
| Flameret vs. Intl Star | Flameret vs. Global Develpmts | Flameret vs. Buyer Group International | Flameret vs. Gold And Gemstone |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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