Correlation Between Asia Metal and Charan Insurance
Can any of the company-specific risk be diversified away by investing in both Asia Metal 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 Asia Metal and Charan Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Metal Public and Charan Insurance Public, you can compare the effects of market volatilities on Asia Metal 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 Asia Metal with a short position of Charan Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and Charan Insurance.
Diversification Opportunities for Asia Metal and Charan Insurance
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Charan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Public 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 Asia Metal 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 Metal Public 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 Asia Metal i.e., Asia Metal and Charan Insurance go up and down completely randomly.
Pair Corralation between Asia Metal and Charan Insurance
Assuming the 90 days trading horizon Asia Metal is expected to generate 1.0 times less return on investment than Charan Insurance. But when comparing it to its historical volatility, Asia Metal Public is 1.0 times less risky than Charan Insurance. It trades about 0.06 of its potential returns per unit of risk. Charan Insurance Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,230 in Charan Insurance Public on September 15, 2024 and sell it today you would lose (70.00) from holding Charan Insurance Public or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Metal Public vs. Charan Insurance Public
Performance |
| Timeline |
| Asia Metal Public |
| Charan Insurance Public |
Asia Metal and Charan Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and Charan Insurance
The main advantage of trading using opposite Asia Metal and Charan Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal 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.| Asia Metal vs. 2S Metal Public | Asia Metal vs. AAPICO Hitech Public | Asia Metal vs. CSP Steel Center | Asia Metal vs. Bangsaphan Barmill Public |
| Charan Insurance vs. Asia Metal Public | Charan Insurance vs. Bangkok Sheet Metal | Charan Insurance vs. Kiatnakin Phatra Bank | Charan Insurance vs. TISCO Financial Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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