Correlation Between First State and ASOS Plc
Can any of the company-specific risk be diversified away by investing in both First State and ASOS Plc 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 First State and ASOS Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and ASOS plc PK, you can compare the effects of market volatilities on First State and ASOS Plc 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 First State with a short position of ASOS Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and ASOS Plc.
Diversification Opportunities for First State and ASOS Plc
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and ASOS is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and ASOS plc PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS plc PK and First State 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 First State Financial are associated (or correlated) with ASOS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS plc PK has no effect on the direction of First State i.e., First State and ASOS Plc go up and down completely randomly.
Pair Corralation between First State and ASOS Plc
Given the investment horizon of 90 days First State Financial is expected to generate 5.42 times more return on investment than ASOS Plc. However, First State is 5.42 times more volatile than ASOS plc PK. It trades about 0.04 of its potential returns per unit of risk. ASOS plc PK is currently generating about 0.16 per unit of risk. If you would invest 3.69 in First State Financial on November 9, 2025 and sell it today you would lose (1.59) from holding First State Financial or give up 43.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
First State Financial vs. ASOS plc PK
Performance |
| Timeline |
| First State Financial |
| ASOS plc PK |
First State and ASOS Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and ASOS Plc
The main advantage of trading using opposite First State and ASOS Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, ASOS Plc 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 ASOS Plc will offset losses from the drop in ASOS Plc's long position.| First State vs. First Republic Bank | First State vs. BioCube | First State vs. Trend Exploration I | First State vs. Eastern Goldfields |
| ASOS Plc vs. THG Plc | ASOS Plc vs. Sa Sa International | ASOS Plc vs. Kogan | ASOS Plc vs. Halfords Group plc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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