Correlation Between Asia Plus and Muramoto Electron
Can any of the company-specific risk be diversified away by investing in both Asia Plus and Muramoto Electron 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 Muramoto Electron 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 Muramoto Electron Public, you can compare the effects of market volatilities on Asia Plus and Muramoto Electron 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 Muramoto Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Plus and Muramoto Electron.
Diversification Opportunities for Asia Plus and Muramoto Electron
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Muramoto is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Muramoto Electron Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muramoto Electron 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 Muramoto Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muramoto Electron Public has no effect on the direction of Asia Plus i.e., Asia Plus and Muramoto Electron go up and down completely randomly.
Pair Corralation between Asia Plus and Muramoto Electron
Assuming the 90 days trading horizon Asia Plus Group is expected to under-perform the Muramoto Electron. But the stock apears to be less risky and, when comparing its historical volatility, Asia Plus Group is 44.85 times less risky than Muramoto Electron. The stock trades about -0.01 of its potential returns per unit of risk. The Muramoto Electron Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 25,560 in Muramoto Electron Public on August 30, 2024 and sell it today you would lose (8,160) from holding Muramoto Electron Public or give up 31.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.17% |
| Values | Daily Returns |
Asia Plus Group vs. Muramoto Electron Public
Performance |
| Timeline |
| Asia Plus Group |
| Muramoto Electron Public |
Asia Plus and Muramoto Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Plus and Muramoto Electron
The main advantage of trading using opposite Asia Plus and Muramoto Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Plus position performs unexpectedly, Muramoto Electron 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 Muramoto Electron will offset losses from the drop in Muramoto Electron'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 |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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