Correlation Between Asia Plus and XSpring Capital
Can any of the company-specific risk be diversified away by investing in both Asia Plus and XSpring Capital 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 XSpring Capital 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 XSpring Capital Public, you can compare the effects of market volatilities on Asia Plus and XSpring Capital 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 XSpring Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Plus and XSpring Capital.
Diversification Opportunities for Asia Plus and XSpring Capital
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and XSpring is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and XSpring Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XSpring Capital 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 XSpring Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XSpring Capital Public has no effect on the direction of Asia Plus i.e., Asia Plus and XSpring Capital go up and down completely randomly.
Pair Corralation between Asia Plus and XSpring Capital
Assuming the 90 days trading horizon Asia Plus Group is expected to under-perform the XSpring Capital. But the stock apears to be less risky and, when comparing its historical volatility, Asia Plus Group is 3.68 times less risky than XSpring Capital. The stock trades about -0.01 of its potential returns per unit of risk. The XSpring Capital Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 99.00 in XSpring Capital Public on August 31, 2024 and sell it today you would lose (4.00) from holding XSpring Capital Public or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Asia Plus Group vs. XSpring Capital Public
Performance |
| Timeline |
| Asia Plus Group |
| XSpring Capital Public |
Asia Plus and XSpring Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Plus and XSpring Capital
The main advantage of trading using opposite Asia Plus and XSpring Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Plus position performs unexpectedly, XSpring Capital 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 XSpring Capital will offset losses from the drop in XSpring Capital's long position.The idea behind Asia Plus Group and XSpring Capital Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| XSpring Capital vs. TMBThanachart Bank Public | XSpring Capital vs. Ngern Tid Lor | XSpring Capital vs. Jay Mart Public | XSpring Capital vs. Sri Trang Gloves |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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