Correlation Between Asia Metal and CK Power
Can any of the company-specific risk be diversified away by investing in both Asia Metal and CK Power 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 CK Power 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 CK Power Public, you can compare the effects of market volatilities on Asia Metal and CK Power 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 CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and CK Power.
Diversification Opportunities for Asia Metal and CK Power
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Asia and CKP-R is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Public and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power 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 CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of Asia Metal i.e., Asia Metal and CK Power go up and down completely randomly.
Pair Corralation between Asia Metal and CK Power
Assuming the 90 days trading horizon Asia Metal Public is expected to generate 32.92 times more return on investment than CK Power. However, Asia Metal is 32.92 times more volatile than CK Power Public. It trades about 0.06 of its potential returns per unit of risk. CK Power Public is currently generating about 0.0 per unit of risk. If you would invest 306.00 in Asia Metal Public on September 14, 2024 and sell it today you would lose (22.00) from holding Asia Metal Public or give up 7.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Metal Public vs. CK Power Public
Performance |
| Timeline |
| Asia Metal Public |
| CK Power Public |
Asia Metal and CK Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and CK Power
The main advantage of trading using opposite Asia Metal and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal position performs unexpectedly, CK Power 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 CK Power will offset losses from the drop in CK Power's long position.| Asia Metal vs. Thantawan Industry Public | Asia Metal vs. The Erawan Group | Asia Metal vs. Jay Mart Public | Asia Metal vs. Airports of Thailand |
| CK Power vs. Charoen Pokphand Foods | CK Power vs. Bank of Ayudhya | CK Power vs. Taokaenoi Food Marketing | CK Power vs. Surapon Foods 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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