Correlation Between Asia Plus and Precious Shipping
Can any of the company-specific risk be diversified away by investing in both Asia Plus and Precious Shipping 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 Precious Shipping 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 Precious Shipping Public, you can compare the effects of market volatilities on Asia Plus and Precious Shipping 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 Precious Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Plus and Precious Shipping.
Diversification Opportunities for Asia Plus and Precious Shipping
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Precious is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Precious Shipping Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Shipping 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 Precious Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Shipping Public has no effect on the direction of Asia Plus i.e., Asia Plus and Precious Shipping go up and down completely randomly.
Pair Corralation between Asia Plus and Precious Shipping
Assuming the 90 days trading horizon Asia Plus Group is expected to generate 0.63 times more return on investment than Precious Shipping. However, Asia Plus Group is 1.58 times less risky than Precious Shipping. It trades about 0.0 of its potential returns per unit of risk. Precious Shipping Public is currently generating about -0.08 per unit of risk. If you would invest 249.00 in Asia Plus Group on September 1, 2024 and sell it today you would lose (5.00) from holding Asia Plus Group or give up 2.01% 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. Precious Shipping Public
Performance |
| Timeline |
| Asia Plus Group |
| Precious Shipping Public |
Asia Plus and Precious Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Plus and Precious Shipping
The main advantage of trading using opposite Asia Plus and Precious Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Plus position performs unexpectedly, Precious Shipping 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 Precious Shipping will offset losses from the drop in Precious Shipping'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 |
| Precious Shipping vs. Thoresen Thai Agencies | Precious Shipping vs. Regional Container Lines | Precious Shipping vs. The Siam Cement | Precious Shipping vs. PTT 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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