Correlation Between Asia Hotel and Charan Insurance
Can any of the company-specific risk be diversified away by investing in both Asia Hotel 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 Hotel 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 Hotel Public and Charan Insurance Public, you can compare the effects of market volatilities on Asia Hotel 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 Hotel with a short position of Charan Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Hotel and Charan Insurance.
Diversification Opportunities for Asia Hotel and Charan Insurance
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and Charan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Asia Hotel 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 Hotel 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 Hotel 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 Hotel i.e., Asia Hotel and Charan Insurance go up and down completely randomly.
Pair Corralation between Asia Hotel and Charan Insurance
Assuming the 90 days trading horizon Asia Hotel Public is expected to generate 101.21 times more return on investment than Charan Insurance. However, Asia Hotel is 101.21 times more volatile than Charan Insurance Public. It trades about 0.11 of its potential returns per unit of risk. Charan Insurance Public is currently generating about -0.05 per unit of risk. If you would invest 675.00 in Asia Hotel Public on September 12, 2024 and sell it today you would lose (20.00) from holding Asia Hotel Public or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Hotel Public vs. Charan Insurance Public
Performance |
| Timeline |
| Asia Hotel Public |
| Charan Insurance Public |
Asia Hotel and Charan Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Hotel and Charan Insurance
The main advantage of trading using opposite Asia Hotel and Charan Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Hotel 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 Hotel vs. Aikchol Hospital Public | Asia Hotel vs. The Erawan Group | Asia Hotel vs. Dynasty Ceramic Public | Asia Hotel vs. Grande Asset Hotels |
| Charan Insurance vs. AIM Industrial Growth | Charan Insurance vs. Thai Coating Industrial | Charan Insurance vs. Firetrade Engineering Public | Charan Insurance vs. K W Metal |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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