Correlation Between Green Resources and Asia Biomass
Can any of the company-specific risk be diversified away by investing in both Green Resources 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 Green Resources and Asia Biomass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Resources Public and Asia Biomass Public, you can compare the effects of market volatilities on Green Resources 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 Green Resources with a short position of Asia Biomass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Resources and Asia Biomass.
Diversification Opportunities for Green Resources and Asia Biomass
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Green and Asia is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Green Resources Public 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 Green Resources 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 Green Resources Public 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 Green Resources i.e., Green Resources and Asia Biomass go up and down completely randomly.
Pair Corralation between Green Resources and Asia Biomass
Assuming the 90 days trading horizon Green Resources Public is expected to generate 1.0 times more return on investment than Asia Biomass. However, Green Resources is 1.0 times more volatile than Asia Biomass Public. It trades about 0.11 of its potential returns per unit of risk. Asia Biomass Public is currently generating about 0.11 per unit of risk. If you would invest 102.00 in Green Resources Public on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Green Resources Public or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Resources Public vs. Asia Biomass Public
Performance |
| Timeline |
| Green Resources Public |
| Asia Biomass Public |
Green Resources and Asia Biomass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Resources and Asia Biomass
The main advantage of trading using opposite Green Resources and Asia Biomass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Resources 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.| Green Resources vs. Ekarat Engineering Public | Green Resources vs. Global Power Synergy | Green Resources vs. BCPG Public | Green Resources vs. IRPC Public |
| Asia Biomass vs. Super Energy | Asia Biomass vs. The Erawan Group | Asia Biomass vs. Autocorp Holding Public | Asia Biomass vs. Ditto 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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