Correlation Between Dynasty Ceramic and Asia Green
Can any of the company-specific risk be diversified away by investing in both Dynasty Ceramic and Asia Green 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 Dynasty Ceramic and Asia Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynasty Ceramic Public and Asia Green Energy, you can compare the effects of market volatilities on Dynasty Ceramic and Asia Green 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 Dynasty Ceramic with a short position of Asia Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynasty Ceramic and Asia Green.
Diversification Opportunities for Dynasty Ceramic and Asia Green
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dynasty and Asia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dynasty Ceramic Public and Asia Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Green Energy and Dynasty Ceramic 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 Dynasty Ceramic Public are associated (or correlated) with Asia Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Green Energy has no effect on the direction of Dynasty Ceramic i.e., Dynasty Ceramic and Asia Green go up and down completely randomly.
Pair Corralation between Dynasty Ceramic and Asia Green
Assuming the 90 days trading horizon Dynasty Ceramic is expected to generate 213.42 times less return on investment than Asia Green. But when comparing it to its historical volatility, Dynasty Ceramic Public is 52.37 times less risky than Asia Green. It trades about 0.02 of its potential returns per unit of risk. Asia Green Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 203.00 in Asia Green Energy on August 25, 2024 and sell it today you would lose (80.00) from holding Asia Green Energy or give up 39.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynasty Ceramic Public vs. Asia Green Energy
Performance |
| Timeline |
| Dynasty Ceramic Public |
| Asia Green Energy |
Dynasty Ceramic and Asia Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynasty Ceramic and Asia Green
The main advantage of trading using opposite Dynasty Ceramic and Asia Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynasty Ceramic position performs unexpectedly, Asia Green 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 Green will offset losses from the drop in Asia Green's long position.| Dynasty Ceramic vs. Tata Steel Public | Dynasty Ceramic vs. Thaifoods Group Public | Dynasty Ceramic vs. TMT Steel Public | Dynasty Ceramic vs. The Erawan Group |
| Asia Green vs. Union Petrochemical Public | Asia Green vs. Eureka Design Public | Asia Green vs. Winner Group Enterprise | Asia Green vs. Ubis 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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