Correlation Between East Coast and Asia Green
Can any of the company-specific risk be diversified away by investing in both East Coast 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 East Coast and Asia Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Coast Furnitech and Asia Green Energy, you can compare the effects of market volatilities on East Coast 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 East Coast with a short position of Asia Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Coast and Asia Green.
Diversification Opportunities for East Coast and Asia Green
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between East and Asia is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding East Coast Furnitech 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 East Coast 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 East Coast Furnitech 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 East Coast i.e., East Coast and Asia Green go up and down completely randomly.
Pair Corralation between East Coast and Asia Green
Assuming the 90 days trading horizon East Coast is expected to generate 1.04 times less return on investment than Asia Green. In addition to that, East Coast is 1.0 times more volatile than Asia Green Energy. It trades about 0.06 of its total potential returns per unit of risk. Asia Green Energy is currently generating about 0.06 per unit of volatility. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Coast Furnitech vs. Asia Green Energy
Performance |
| Timeline |
| East Coast Furnitech |
| Asia Green Energy |
East Coast and Asia Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Coast and Asia Green
The main advantage of trading using opposite East Coast and Asia Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Coast 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.| East Coast vs. G Capital Public | East Coast vs. E for L | East Coast vs. Filter Vision Public | East Coast vs. Chewathai Public |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |