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
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Asia and Charan is 0.86. 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 Public is expected to generate 0.55 times more return on investment than Charan Insurance. However, Asia Metal Public is 1.82 times less risky than Charan Insurance. It trades about 0.21 of its potential returns per unit of risk. Charan Insurance Public is currently generating about -0.03 per unit of risk. If you would invest 183.00 in Asia Metal Public on November 3, 2024 and sell it today you would earn a total of 14.00 from holding Asia Metal Public or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| 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. City Steel Public | Asia Metal vs. Prime Office Leasehold | Asia Metal vs. HEMARAJ INDUSTRIAL PROPERTY | Asia Metal vs. Future Park Leasehold |
| Charan Insurance vs. Bank of Ayudhya | Charan Insurance vs. Thai Industrial | Charan Insurance vs. Thai Reinsurance Public | Charan Insurance vs. Amata Summit Growth |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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