Correlation Between Asphere Innovations and Kingsmen CMTI
Can any of the company-specific risk be diversified away by investing in both Asphere Innovations and Kingsmen CMTI 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 Asphere Innovations and Kingsmen CMTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asphere Innovations Public and Kingsmen CMTI Public, you can compare the effects of market volatilities on Asphere Innovations and Kingsmen CMTI 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 Asphere Innovations with a short position of Kingsmen CMTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asphere Innovations and Kingsmen CMTI.
Diversification Opportunities for Asphere Innovations and Kingsmen CMTI
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asphere and Kingsmen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Asphere Innovations Public and Kingsmen CMTI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen CMTI Public and Asphere Innovations 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 Asphere Innovations Public are associated (or correlated) with Kingsmen CMTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen CMTI Public has no effect on the direction of Asphere Innovations i.e., Asphere Innovations and Kingsmen CMTI go up and down completely randomly.
Pair Corralation between Asphere Innovations and Kingsmen CMTI
Assuming the 90 days horizon Asphere Innovations Public is expected to generate 0.95 times more return on investment than Kingsmen CMTI. However, Asphere Innovations Public is 1.06 times less risky than Kingsmen CMTI. It trades about 0.0 of its potential returns per unit of risk. Kingsmen CMTI Public is currently generating about -0.08 per unit of risk. If you would invest 386.00 in Asphere Innovations Public on September 13, 2024 and sell it today you would lose (4.00) from holding Asphere Innovations Public or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asphere Innovations Public vs. Kingsmen CMTI Public
Performance |
| Timeline |
| Asphere Innovations |
| Kingsmen CMTI Public |
Asphere Innovations and Kingsmen CMTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asphere Innovations and Kingsmen CMTI
The main advantage of trading using opposite Asphere Innovations and Kingsmen CMTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asphere Innovations position performs unexpectedly, Kingsmen CMTI 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 Kingsmen CMTI will offset losses from the drop in Kingsmen CMTI's long position.| Asphere Innovations vs. Bangkok Chain Hospital | Asphere Innovations vs. Jay Mart Public | Asphere Innovations vs. Energy Absolute Public | Asphere Innovations vs. Delta Electronics Public |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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