Correlation Between Plastic Omnium and Asahi Group
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium and Asahi Group 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 Plastic Omnium and Asahi Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and Asahi Group Holdings, you can compare the effects of market volatilities on Plastic Omnium and Asahi Group 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 Plastic Omnium with a short position of Asahi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Asahi Group.
Diversification Opportunities for Plastic Omnium and Asahi Group
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plastic and Asahi is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and Asahi Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Group Holdings and Plastic Omnium 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 Plastic Omnium are associated (or correlated) with Asahi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Group Holdings has no effect on the direction of Plastic Omnium i.e., Plastic Omnium and Asahi Group go up and down completely randomly.
Pair Corralation between Plastic Omnium and Asahi Group
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 2.02 times more return on investment than Asahi Group. However, Plastic Omnium is 2.02 times more volatile than Asahi Group Holdings. It trades about 0.19 of its potential returns per unit of risk. Asahi Group Holdings is currently generating about -0.02 per unit of risk. If you would invest 896.00 in Plastic Omnium on September 14, 2024 and sell it today you would earn a total of 108.00 from holding Plastic Omnium or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. Asahi Group Holdings
Performance |
| Timeline |
| Plastic Omnium |
| Asahi Group Holdings |
Plastic Omnium and Asahi Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Asahi Group
The main advantage of trading using opposite Plastic Omnium and Asahi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium position performs unexpectedly, Asahi Group 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 Asahi Group will offset losses from the drop in Asahi Group's long position.| Plastic Omnium vs. Micron Technology | Plastic Omnium vs. FARO Technologies | Plastic Omnium vs. SMA Solar Technology | Plastic Omnium vs. ACCSYS TECHPLC EO |
| Asahi Group vs. Q2M Managementberatung AG | Asahi Group vs. Vulcan Materials | Asahi Group vs. Eagle Materials | Asahi Group vs. Plastic Omnium |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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