Correlation Between Union Auction and ASIA Capital
Can any of the company-specific risk be diversified away by investing in both Union Auction and ASIA 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 Union Auction and ASIA Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Auction Public and ASIA Capital Group, you can compare the effects of market volatilities on Union Auction and ASIA 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 Union Auction with a short position of ASIA Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Auction and ASIA Capital.
Diversification Opportunities for Union Auction and ASIA Capital
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and ASIA is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Union Auction Public and ASIA Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASIA Capital Group and Union Auction 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 Union Auction Public are associated (or correlated) with ASIA Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASIA Capital Group has no effect on the direction of Union Auction i.e., Union Auction and ASIA Capital go up and down completely randomly.
Pair Corralation between Union Auction and ASIA Capital
Assuming the 90 days trading horizon Union Auction Public is expected to generate 0.05 times more return on investment than ASIA Capital. However, Union Auction Public is 19.2 times less risky than ASIA Capital. It trades about -0.45 of its potential returns per unit of risk. ASIA Capital Group is currently generating about -0.21 per unit of risk. If you would invest 950.00 in Union Auction Public on August 29, 2024 and sell it today you would lose (100.00) from holding Union Auction Public or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Auction Public vs. ASIA Capital Group
Performance |
| Timeline |
| Union Auction Public |
| ASIA Capital Group |
Union Auction and ASIA Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Auction and ASIA Capital
The main advantage of trading using opposite Union Auction and ASIA Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Auction position performs unexpectedly, ASIA 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 ASIA Capital will offset losses from the drop in ASIA Capital's long position.| Union Auction vs. AP Public | Union Auction vs. Carabao Group Public | Union Auction vs. Forth Smart Service | Union Auction vs. Com7 PCL |
| ASIA Capital vs. Amanah Leasing Public | ASIA Capital vs. Infraset Public | ASIA Capital vs. JMT Network Services |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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