Correlation Between Bless Asset and Home Pottery
Can any of the company-specific risk be diversified away by investing in both Bless Asset and Home Pottery 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 Bless Asset and Home Pottery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bless Asset Group and Home Pottery Public, you can compare the effects of market volatilities on Bless Asset and Home Pottery 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 Bless Asset with a short position of Home Pottery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bless Asset and Home Pottery.
Diversification Opportunities for Bless Asset and Home Pottery
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bless and Home is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bless Asset Group and Home Pottery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Pottery Public and Bless Asset 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 Bless Asset Group are associated (or correlated) with Home Pottery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Pottery Public has no effect on the direction of Bless Asset i.e., Bless Asset and Home Pottery go up and down completely randomly.
Pair Corralation between Bless Asset and Home Pottery
Assuming the 90 days trading horizon Bless Asset Group is expected to under-perform the Home Pottery. In addition to that, Bless Asset is 1.47 times more volatile than Home Pottery Public. It trades about -0.07 of its total potential returns per unit of risk. Home Pottery Public is currently generating about -0.06 per unit of volatility. If you would invest 56.00 in Home Pottery Public on September 1, 2024 and sell it today you would lose (11.00) from holding Home Pottery Public or give up 19.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Bless Asset Group vs. Home Pottery Public
Performance |
| Timeline |
| Bless Asset Group |
| Home Pottery Public |
Bless Asset and Home Pottery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bless Asset and Home Pottery
The main advantage of trading using opposite Bless Asset and Home Pottery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bless Asset position performs unexpectedly, Home Pottery 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 Home Pottery will offset losses from the drop in Home Pottery's long position.| Bless Asset vs. AP Public | Bless Asset vs. TRC Construction Public | Bless Asset vs. Bangkok Expressway and | Bless Asset vs. Lohakit Metal 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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