Correlation Between Alliance Global and Jardine Matheson
Can any of the company-specific risk be diversified away by investing in both Alliance Global and Jardine Matheson 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 Alliance Global and Jardine Matheson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Global Group and Jardine Matheson Holdings, you can compare the effects of market volatilities on Alliance Global and Jardine Matheson 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 Alliance Global with a short position of Jardine Matheson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Global and Jardine Matheson.
Diversification Opportunities for Alliance Global and Jardine Matheson
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alliance and Jardine is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Global Group and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings and Alliance Global 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 Alliance Global Group are associated (or correlated) with Jardine Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of Alliance Global i.e., Alliance Global and Jardine Matheson go up and down completely randomly.
Pair Corralation between Alliance Global and Jardine Matheson
Assuming the 90 days horizon Alliance Global Group is expected to under-perform the Jardine Matheson. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alliance Global Group is 2.02 times less risky than Jardine Matheson. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Jardine Matheson Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,750 in Jardine Matheson Holdings on September 2, 2024 and sell it today you would earn a total of 364.00 from holding Jardine Matheson Holdings or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Global Group vs. Jardine Matheson Holdings
Performance |
| Timeline |
| Alliance Global Group |
| Jardine Matheson Holdings |
Alliance Global and Jardine Matheson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Global and Jardine Matheson
The main advantage of trading using opposite Alliance Global and Jardine Matheson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Global position performs unexpectedly, Jardine Matheson 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 Jardine Matheson will offset losses from the drop in Jardine Matheson's long position.| Alliance Global vs. Alliance Recovery | Alliance Global vs. Ayala | Alliance Global vs. Alaska Power Telephone | Alliance Global vs. RCABS Inc |
| Jardine Matheson vs. 3M Company | Jardine Matheson vs. CK Hutchison Holdings | Jardine Matheson vs. Swire Pacific Ltd | Jardine Matheson vs. Teijin |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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