Correlation Between Asia Plus and Asia Aviation
Can any of the company-specific risk be diversified away by investing in both Asia Plus and Asia Aviation 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 Plus and Asia Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Plus Group and Asia Aviation Public, you can compare the effects of market volatilities on Asia Plus and Asia Aviation 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 Plus with a short position of Asia Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Plus and Asia Aviation.
Diversification Opportunities for Asia Plus and Asia Aviation
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Asia is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Asia Aviation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Aviation Public and Asia Plus 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 Plus Group are associated (or correlated) with Asia Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Aviation Public has no effect on the direction of Asia Plus i.e., Asia Plus and Asia Aviation go up and down completely randomly.
Pair Corralation between Asia Plus and Asia Aviation
Assuming the 90 days trading horizon Asia Plus Group is expected to generate 0.55 times more return on investment than Asia Aviation. However, Asia Plus Group is 1.83 times less risky than Asia Aviation. It trades about -0.08 of its potential returns per unit of risk. Asia Aviation Public is currently generating about -0.09 per unit of risk. If you would invest 250.00 in Asia Plus Group on August 29, 2024 and sell it today you would lose (4.00) from holding Asia Plus Group or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Plus Group vs. Asia Aviation Public
Performance |
| Timeline |
| Asia Plus Group |
| Asia Aviation Public |
Asia Plus and Asia Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Plus and Asia Aviation
The main advantage of trading using opposite Asia Plus and Asia Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Plus position performs unexpectedly, Asia Aviation 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 Asia Aviation will offset losses from the drop in Asia Aviation's long position.| Asia Plus vs. KGI Securities Public | Asia Plus vs. Bangkok Bank Public | Asia Plus vs. Land and Houses | Asia Plus vs. Italian Thai Development Public |
| Asia Aviation vs. MCS Steel Public | Asia Aviation vs. Asia Plus Group | Asia Aviation vs. Lalin Property Public | Asia Aviation vs. Lam Soon 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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