Correlation Between Crown Asia and VistaREIT
Can any of the company-specific risk be diversified away by investing in both Crown Asia and VistaREIT 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 Crown Asia and VistaREIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Asia Chemicals and VistaREIT, you can compare the effects of market volatilities on Crown Asia and VistaREIT 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 Crown Asia with a short position of VistaREIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Asia and VistaREIT.
Diversification Opportunities for Crown Asia and VistaREIT
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crown and VistaREIT is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Crown Asia Chemicals and VistaREIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VistaREIT and Crown Asia 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 Crown Asia Chemicals are associated (or correlated) with VistaREIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VistaREIT has no effect on the direction of Crown Asia i.e., Crown Asia and VistaREIT go up and down completely randomly.
Pair Corralation between Crown Asia and VistaREIT
Assuming the 90 days trading horizon Crown Asia is expected to generate 1.4 times less return on investment than VistaREIT. In addition to that, Crown Asia is 1.95 times more volatile than VistaREIT. It trades about 0.02 of its total potential returns per unit of risk. VistaREIT is currently generating about 0.07 per unit of volatility. If you would invest 136.00 in VistaREIT on November 27, 2024 and sell it today you would earn a total of 47.00 from holding VistaREIT or generate 34.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.75% |
| Values | Daily Returns |
Crown Asia Chemicals vs. VistaREIT
Performance |
| Timeline |
| Crown Asia Chemicals |
| VistaREIT |
Crown Asia and VistaREIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Asia and VistaREIT
The main advantage of trading using opposite Crown Asia and VistaREIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Asia position performs unexpectedly, VistaREIT 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 VistaREIT will offset losses from the drop in VistaREIT's long position.| Crown Asia vs. Premiere Entertainment | Crown Asia vs. Semirara Mining Corp | Crown Asia vs. Philex Mining Corp | Crown Asia vs. Bank of the |
| VistaREIT vs. Semirara Mining Corp | VistaREIT vs. Sun Life Financial | VistaREIT vs. Apex Mining Co | VistaREIT vs. Union Bank of |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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