Correlation Between AJ LUCAS and CORONGLRES CDIS101
Can any of the company-specific risk be diversified away by investing in both AJ LUCAS and CORONGLRES CDIS101 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 AJ LUCAS and CORONGLRES CDIS101 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ LUCAS GROUP and CORONGLRES CDIS101, you can compare the effects of market volatilities on AJ LUCAS and CORONGLRES CDIS101 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 AJ LUCAS with a short position of CORONGLRES CDIS101. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ LUCAS and CORONGLRES CDIS101.
Diversification Opportunities for AJ LUCAS and CORONGLRES CDIS101
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FW9 and CORONGLRES is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AJ LUCAS GROUP and CORONGLRES CDIS101 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORONGLRES CDIS101 and AJ LUCAS 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 AJ LUCAS GROUP are associated (or correlated) with CORONGLRES CDIS101. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORONGLRES CDIS101 has no effect on the direction of AJ LUCAS i.e., AJ LUCAS and CORONGLRES CDIS101 go up and down completely randomly.
Pair Corralation between AJ LUCAS and CORONGLRES CDIS101
Assuming the 90 days horizon AJ LUCAS GROUP is expected to generate 9.9 times more return on investment than CORONGLRES CDIS101. However, AJ LUCAS is 9.9 times more volatile than CORONGLRES CDIS101. It trades about 0.08 of its potential returns per unit of risk. CORONGLRES CDIS101 is currently generating about -0.21 per unit of risk. If you would invest 0.15 in AJ LUCAS GROUP on September 12, 2024 and sell it today you would lose (0.10) from holding AJ LUCAS GROUP or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ LUCAS GROUP vs. CORONGLRES CDIS101
Performance |
| Timeline |
| AJ LUCAS GROUP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| CORONGLRES CDIS101 |
AJ LUCAS and CORONGLRES CDIS101 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ LUCAS and CORONGLRES CDIS101
The main advantage of trading using opposite AJ LUCAS and CORONGLRES CDIS101 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ LUCAS position performs unexpectedly, CORONGLRES CDIS101 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 CORONGLRES CDIS101 will offset losses from the drop in CORONGLRES CDIS101's long position.| AJ LUCAS vs. Eagle Materials | AJ LUCAS vs. Compagnie Plastic Omnium | AJ LUCAS vs. GOODYEAR T RUBBER | AJ LUCAS vs. Hyster Yale Materials Handling |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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