Correlation Between Development Investment and Asia Commercial
Can any of the company-specific risk be diversified away by investing in both Development Investment and Asia Commercial 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 Development Investment and Asia Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Development Investment Construction and Asia Commercial Bank, you can compare the effects of market volatilities on Development Investment and Asia Commercial 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 Development Investment with a short position of Asia Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Development Investment and Asia Commercial.
Diversification Opportunities for Development Investment and Asia Commercial
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Development and Asia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Development Investment Constru and Asia Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Commercial Bank and Development Investment 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 Development Investment Construction are associated (or correlated) with Asia Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Commercial Bank has no effect on the direction of Development Investment i.e., Development Investment and Asia Commercial go up and down completely randomly.
Pair Corralation between Development Investment and Asia Commercial
Assuming the 90 days trading horizon Development Investment Construction is expected to under-perform the Asia Commercial. In addition to that, Development Investment is 1.23 times more volatile than Asia Commercial Bank. It trades about -0.05 of its total potential returns per unit of risk. Asia Commercial Bank is currently generating about 0.05 per unit of volatility. If you would invest 1,879,991 in Asia Commercial Bank on September 15, 2024 and sell it today you would earn a total of 475,009 from holding Asia Commercial Bank or generate 25.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.67% |
| Values | Daily Returns |
Development Investment Constru vs. Asia Commercial Bank
Performance |
| Timeline |
| Development Investment |
| Asia Commercial Bank |
Development Investment and Asia Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Development Investment and Asia Commercial
The main advantage of trading using opposite Development Investment and Asia Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Development Investment position performs unexpectedly, Asia Commercial 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 Commercial will offset losses from the drop in Asia Commercial's long position.| Development Investment vs. FIT INVEST JSC | Development Investment vs. Damsan JSC | Development Investment vs. An Phat Plastic | Development Investment vs. Alphanam ME |
| Asia Commercial vs. Development Investment Construction | Asia Commercial vs. Agriculture Printing and | Asia Commercial vs. Mechanics Construction and | Asia Commercial vs. Pacific Petroleum Transportation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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