Correlation Between Asset World and Lee Feed
Can any of the company-specific risk be diversified away by investing in both Asset World and Lee Feed 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 Asset World and Lee Feed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asset World Corp and Lee Feed Mill, you can compare the effects of market volatilities on Asset World and Lee Feed 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 Asset World with a short position of Lee Feed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asset World and Lee Feed.
Diversification Opportunities for Asset World and Lee Feed
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asset and Lee is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Asset World Corp and Lee Feed Mill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Feed Mill and Asset World 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 Asset World Corp are associated (or correlated) with Lee Feed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Feed Mill has no effect on the direction of Asset World i.e., Asset World and Lee Feed go up and down completely randomly.
Pair Corralation between Asset World and Lee Feed
Assuming the 90 days trading horizon Asset World Corp is expected to under-perform the Lee Feed. In addition to that, Asset World is 1.82 times more volatile than Lee Feed Mill. It trades about -0.23 of its total potential returns per unit of risk. Lee Feed Mill is currently generating about -0.07 per unit of volatility. If you would invest 236.00 in Lee Feed Mill on November 4, 2024 and sell it today you would lose (4.00) from holding Lee Feed Mill or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asset World Corp vs. Lee Feed Mill
Performance |
| Timeline |
| Asset World Corp |
| Lee Feed Mill |
Asset World and Lee Feed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asset World and Lee Feed
The main advantage of trading using opposite Asset World and Lee Feed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asset World position performs unexpectedly, Lee Feed 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 Lee Feed will offset losses from the drop in Lee Feed's long position.| Asset World vs. OHTL Public | Asset World vs. Laguna Resorts Hotels | Asset World vs. Shangri La Hotel Public | Asset World vs. Ramkhamhaeng Hospital Public |
| Lee Feed vs. GFPT Public | Lee Feed vs. KGI Securities Public | Lee Feed vs. Thai Vegetable Oil | Lee Feed 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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