Correlation Between Communication System and Asian Sea
Can any of the company-specific risk be diversified away by investing in both Communication System and Asian Sea 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 Communication System and Asian Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication System Solution and Asian Sea, you can compare the effects of market volatilities on Communication System and Asian Sea 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 Communication System with a short position of Asian Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication System and Asian Sea.
Diversification Opportunities for Communication System and Asian Sea
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Communication and Asian is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Communication System Solution and Asian Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Sea and Communication System 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 Communication System Solution are associated (or correlated) with Asian Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Sea has no effect on the direction of Communication System i.e., Communication System and Asian Sea go up and down completely randomly.
Pair Corralation between Communication System and Asian Sea
Assuming the 90 days trading horizon Communication System Solution is expected to generate 3.1 times more return on investment than Asian Sea. However, Communication System is 3.1 times more volatile than Asian Sea. It trades about 0.16 of its potential returns per unit of risk. Asian Sea is currently generating about -0.22 per unit of risk. If you would invest 87.00 in Communication System Solution on August 25, 2024 and sell it today you would earn a total of 11.00 from holding Communication System Solution or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication System Solution vs. Asian Sea
Performance |
| Timeline |
| Communication System |
| Asian Sea |
Communication System and Asian Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication System and Asian Sea
The main advantage of trading using opposite Communication System and Asian Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication System position performs unexpectedly, Asian Sea 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 Asian Sea will offset losses from the drop in Asian Sea's long position.| Communication System vs. Tata Steel Public | Communication System vs. Thaifoods Group Public | Communication System vs. TMT Steel Public | Communication System vs. The Erawan Group |
| Asian Sea vs. GFPT Public | Asian Sea vs. Carabao Group Public | Asian Sea vs. Thai Union Group | Asian Sea vs. Agripure Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges |