Correlation Between Earth Tech and Asia Biomass
Can any of the company-specific risk be diversified away by investing in both Earth Tech and Asia Biomass 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 Earth Tech and Asia Biomass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Earth Tech Environment and Asia Biomass Public, you can compare the effects of market volatilities on Earth Tech and Asia Biomass 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 Earth Tech with a short position of Asia Biomass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Earth Tech and Asia Biomass.
Diversification Opportunities for Earth Tech and Asia Biomass
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Earth and Asia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Earth Tech Environment and Asia Biomass Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Biomass Public and Earth Tech 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 Earth Tech Environment are associated (or correlated) with Asia Biomass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Biomass Public has no effect on the direction of Earth Tech i.e., Earth Tech and Asia Biomass go up and down completely randomly.
Pair Corralation between Earth Tech and Asia Biomass
Assuming the 90 days trading horizon Earth Tech is expected to generate 1.67 times less return on investment than Asia Biomass. In addition to that, Earth Tech is 4.33 times more volatile than Asia Biomass Public. It trades about 0.01 of its total potential returns per unit of risk. Asia Biomass Public is currently generating about 0.05 per unit of volatility. If you would invest 129.00 in Asia Biomass Public on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Asia Biomass Public or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Earth Tech Environment vs. Asia Biomass Public
Performance |
| Timeline |
| Earth Tech Environment |
| Asia Biomass Public |
Earth Tech and Asia Biomass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Earth Tech and Asia Biomass
The main advantage of trading using opposite Earth Tech and Asia Biomass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Earth Tech position performs unexpectedly, Asia Biomass 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 Biomass will offset losses from the drop in Asia Biomass' long position.| Earth Tech vs. Gulf Energy Development | Earth Tech vs. Energy Absolute Public | Earth Tech vs. Gunkul Engineering Public | Earth Tech vs. Global Power Synergy |
| Asia Biomass vs. Akkhie Prakarn Public | Asia Biomass vs. AIRA Factoring Public | Asia Biomass vs. G Capital Public | Asia Biomass vs. Asia Green Energy |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |