Correlation Between Charan Insurance and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Charan Insurance and Asia Metal 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 Charan Insurance and Asia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charan Insurance Public and Asia Metal Public, you can compare the effects of market volatilities on Charan Insurance and Asia Metal 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 Charan Insurance with a short position of Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charan Insurance and Asia Metal.
Diversification Opportunities for Charan Insurance and Asia Metal
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charan and Asia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Charan Insurance Public and Asia Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Public and Charan Insurance 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 Charan Insurance Public are associated (or correlated) with Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Public has no effect on the direction of Charan Insurance i.e., Charan Insurance and Asia Metal go up and down completely randomly.
Pair Corralation between Charan Insurance and Asia Metal
Assuming the 90 days trading horizon Charan Insurance Public is expected to generate 0.59 times more return on investment than Asia Metal. However, Charan Insurance Public is 1.69 times less risky than Asia Metal. It trades about -0.09 of its potential returns per unit of risk. Asia Metal Public is currently generating about -0.25 per unit of risk. If you would invest 2,200 in Charan Insurance Public on September 15, 2024 and sell it today you would lose (40.00) from holding Charan Insurance Public or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charan Insurance Public vs. Asia Metal Public
Performance |
| Timeline |
| Charan Insurance Public |
| Asia Metal Public |
Charan Insurance and Asia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charan Insurance and Asia Metal
The main advantage of trading using opposite Charan Insurance and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charan Insurance position performs unexpectedly, Asia Metal 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 Metal will offset losses from the drop in Asia Metal's long position.| Charan Insurance vs. Asia Metal Public | Charan Insurance vs. Bangkok Sheet Metal | Charan Insurance vs. Kiatnakin Phatra Bank | Charan Insurance vs. TISCO Financial Group |
| Asia Metal vs. 2S Metal Public | Asia Metal vs. AAPICO Hitech Public | Asia Metal vs. CSP Steel Center | Asia Metal vs. Bangsaphan Barmill 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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