Correlation Between PURE FOODS and ASM Pacific
Can any of the company-specific risk be diversified away by investing in both PURE FOODS and ASM Pacific 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 PURE FOODS and ASM Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PURE FOODS TASMANIA and ASM Pacific Technology, you can compare the effects of market volatilities on PURE FOODS and ASM Pacific 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 PURE FOODS with a short position of ASM Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of PURE FOODS and ASM Pacific.
Diversification Opportunities for PURE FOODS and ASM Pacific
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PURE and ASM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PURE FOODS TASMANIA and ASM Pacific Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM Pacific Technology and PURE FOODS 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 PURE FOODS TASMANIA are associated (or correlated) with ASM Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM Pacific Technology has no effect on the direction of PURE FOODS i.e., PURE FOODS and ASM Pacific go up and down completely randomly.
Pair Corralation between PURE FOODS and ASM Pacific
If you would invest 920.00 in ASM Pacific Technology on October 23, 2024 and sell it today you would lose (15.00) from holding ASM Pacific Technology or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
PURE FOODS TASMANIA vs. ASM Pacific Technology
Performance |
| Timeline |
| PURE FOODS TASMANIA |
| ASM Pacific Technology |
PURE FOODS and ASM Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PURE FOODS and ASM Pacific
The main advantage of trading using opposite PURE FOODS and ASM Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PURE FOODS position performs unexpectedly, ASM Pacific 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 ASM Pacific will offset losses from the drop in ASM Pacific's long position.| PURE FOODS vs. Playa Hotels Resorts | PURE FOODS vs. PLAYTIKA HOLDING DL 01 | PURE FOODS vs. Gaming and Leisure | PURE FOODS vs. Air Lease |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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