Correlation Between AJ Advance and Charan Insurance
Can any of the company-specific risk be diversified away by investing in both AJ Advance and Charan Insurance 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 AJ Advance and Charan Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Advance Technology and Charan Insurance Public, you can compare the effects of market volatilities on AJ Advance and Charan Insurance 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 AJ Advance with a short position of Charan Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Advance and Charan Insurance.
Diversification Opportunities for AJ Advance and Charan Insurance
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AJA and Charan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding AJ Advance Technology and Charan Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charan Insurance Public and AJ Advance 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 AJ Advance Technology are associated (or correlated) with Charan Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charan Insurance Public has no effect on the direction of AJ Advance i.e., AJ Advance and Charan Insurance go up and down completely randomly.
Pair Corralation between AJ Advance and Charan Insurance
Assuming the 90 days trading horizon AJ Advance Technology is expected to under-perform the Charan Insurance. In addition to that, AJ Advance is 2.97 times more volatile than Charan Insurance Public. It trades about -0.04 of its total potential returns per unit of risk. Charan Insurance Public is currently generating about -0.07 per unit of volatility. If you would invest 2,230 in Charan Insurance Public on September 19, 2024 and sell it today you would lose (100.00) from holding Charan Insurance Public or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Advance Technology vs. Charan Insurance Public
Performance |
| Timeline |
| AJ Advance Technology |
| Charan Insurance Public |
AJ Advance and Charan Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Advance and Charan Insurance
The main advantage of trading using opposite AJ Advance and Charan Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Advance position performs unexpectedly, Charan Insurance 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 Charan Insurance will offset losses from the drop in Charan Insurance's long position.| AJ Advance vs. AAPICO Hitech Public | AJ Advance vs. Haad Thip Public | AJ Advance vs. Italian Thai Development Public |
| Charan Insurance vs. Sri panwa Hospitality | Charan Insurance vs. Sabuy Technology Public | Charan Insurance vs. Healthlead Public | Charan Insurance vs. Advanced Information Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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