Correlation Between Asia Medical and TRV Rubber
Can any of the company-specific risk be diversified away by investing in both Asia Medical and TRV Rubber 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 TRV Rubber 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 TRV Rubber Products, you can compare the effects of market volatilities on Asia Medical and TRV Rubber 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 TRV Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Medical and TRV Rubber.
Diversification Opportunities for Asia Medical and TRV Rubber
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and TRV is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Asia Medical Agricultural and TRV Rubber Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRV Rubber Products 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 TRV Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRV Rubber Products has no effect on the direction of Asia Medical i.e., Asia Medical and TRV Rubber go up and down completely randomly.
Pair Corralation between Asia Medical and TRV Rubber
Assuming the 90 days trading horizon Asia Medical Agricultural is expected to under-perform the TRV Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Asia Medical Agricultural is 1.41 times less risky than TRV Rubber. The stock trades about -0.04 of its potential returns per unit of risk. The TRV Rubber Products is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 392.00 in TRV Rubber Products on September 2, 2024 and sell it today you would lose (148.00) from holding TRV Rubber Products or give up 37.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Asia Medical Agricultural vs. TRV Rubber Products
Performance |
| Timeline |
| Asia Medical Agricultural |
| TRV Rubber Products |
Asia Medical and TRV Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Medical and TRV Rubber
The main advantage of trading using opposite Asia Medical and TRV Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Medical position performs unexpectedly, TRV Rubber 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 TRV Rubber will offset losses from the drop in TRV Rubber'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 |
| TRV Rubber vs. Silicon Craft Technology | TRV Rubber vs. Information and Communication | TRV Rubber vs. Healthlead Public | TRV Rubber vs. Bioscience Animal Health |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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