Correlation Between Asahi Kaisei and Green Plains
Can any of the company-specific risk be diversified away by investing in both Asahi Kaisei and Green Plains 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 Kaisei and Green Plains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asahi Kaisei Corp and Green Plains Renewable, you can compare the effects of market volatilities on Asahi Kaisei and Green Plains 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 Kaisei with a short position of Green Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asahi Kaisei and Green Plains.
Diversification Opportunities for Asahi Kaisei and Green Plains
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asahi and Green is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Asahi Kaisei Corp and Green Plains Renewable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Plains Renewable and Asahi Kaisei 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 Kaisei Corp are associated (or correlated) with Green Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Plains Renewable has no effect on the direction of Asahi Kaisei i.e., Asahi Kaisei and Green Plains go up and down completely randomly.
Pair Corralation between Asahi Kaisei and Green Plains
Assuming the 90 days horizon Asahi Kaisei Corp is expected to generate 0.55 times more return on investment than Green Plains. However, Asahi Kaisei Corp is 1.83 times less risky than Green Plains. It trades about 0.07 of its potential returns per unit of risk. Green Plains Renewable is currently generating about -0.15 per unit of risk. If you would invest 1,383 in Asahi Kaisei Corp on September 1, 2024 and sell it today you would earn a total of 38.00 from holding Asahi Kaisei Corp or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Asahi Kaisei Corp vs. Green Plains Renewable
Performance |
| Timeline |
| Asahi Kaisei Corp |
| Green Plains Renewable |
Asahi Kaisei and Green Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asahi Kaisei and Green Plains
The main advantage of trading using opposite Asahi Kaisei and Green Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asahi Kaisei position performs unexpectedly, Green Plains 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 Green Plains will offset losses from the drop in Green Plains' long position.| Asahi Kaisei vs. BASF SE NA | Asahi Kaisei vs. Braskem SA Class | Asahi Kaisei vs. Lsb Industries | Asahi Kaisei vs. Dow Inc |
| Green Plains vs. Lsb Industries | Green Plains vs. AdvanSix | Green Plains vs. Tronox Holdings PLC | Green Plains vs. Methanex |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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