Correlation Between Asia Medical and Asian Alliance
Can any of the company-specific risk be diversified away by investing in both Asia Medical and Asian Alliance 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 Medical and Asian Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Medical Agricultural and Asian Alliance International, you can compare the effects of market volatilities on Asia Medical and Asian Alliance 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 Medical with a short position of Asian Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Medical and Asian Alliance.
Diversification Opportunities for Asia Medical and Asian Alliance
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Asian is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Asia Medical Agricultural and Asian Alliance International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Alliance Inter and Asia Medical 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 Medical Agricultural are associated (or correlated) with Asian Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Alliance Inter has no effect on the direction of Asia Medical i.e., Asia Medical and Asian Alliance go up and down completely randomly.
Pair Corralation between Asia Medical and Asian Alliance
Assuming the 90 days trading horizon Asia Medical Agricultural is expected to generate 1.41 times more return on investment than Asian Alliance. However, Asia Medical is 1.41 times more volatile than Asian Alliance International. It trades about 0.1 of its potential returns per unit of risk. Asian Alliance International is currently generating about -0.33 per unit of risk. If you would invest 134.00 in Asia Medical Agricultural on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Asia Medical Agricultural or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Asia Medical Agricultural vs. Asian Alliance International
Performance |
| Timeline |
| Asia Medical Agricultural |
| Asian Alliance Inter |
Asia Medical and Asian Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Medical and Asian Alliance
The main advantage of trading using opposite Asia Medical and Asian Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Medical position performs unexpectedly, Asian Alliance 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 Asian Alliance will offset losses from the drop in Asian Alliance's long position.| Asia Medical vs. The Klinique Med | Asia Medical vs. Exotic Food Public | Asia Medical vs. The Erawan Group | Asia Medical vs. Autocorp Holding Public |
| Asian Alliance vs. Mega Lifesciences Public | Asian Alliance vs. Com7 PCL | Asian Alliance vs. Thai Union Group | Asian Alliance vs. Jay Mart 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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