Correlation Between IDJ FINANCIAL and Asia Commercial
Can any of the company-specific risk be diversified away by investing in both IDJ FINANCIAL and Asia Commercial 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 IDJ FINANCIAL and Asia Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDJ FINANCIAL and Asia Commercial Bank, you can compare the effects of market volatilities on IDJ FINANCIAL and Asia Commercial 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 IDJ FINANCIAL with a short position of Asia Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and Asia Commercial.
Diversification Opportunities for IDJ FINANCIAL and Asia Commercial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between IDJ and Asia is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL and Asia Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Commercial Bank and IDJ FINANCIAL 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 IDJ FINANCIAL are associated (or correlated) with Asia Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Commercial Bank has no effect on the direction of IDJ FINANCIAL i.e., IDJ FINANCIAL and Asia Commercial go up and down completely randomly.
Pair Corralation between IDJ FINANCIAL and Asia Commercial
Assuming the 90 days trading horizon IDJ FINANCIAL is expected to under-perform the Asia Commercial. In addition to that, IDJ FINANCIAL is 2.08 times more volatile than Asia Commercial Bank. It trades about -0.08 of its total potential returns per unit of risk. Asia Commercial Bank is currently generating about 0.04 per unit of volatility. If you would invest 2,470,000 in Asia Commercial Bank on September 2, 2024 and sell it today you would earn a total of 50,000 from holding Asia Commercial Bank or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
IDJ FINANCIAL vs. Asia Commercial Bank
Performance |
| Timeline |
| IDJ FINANCIAL |
| Asia Commercial Bank |
IDJ FINANCIAL and Asia Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDJ FINANCIAL and Asia Commercial
The main advantage of trading using opposite IDJ FINANCIAL and Asia Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDJ FINANCIAL position performs unexpectedly, Asia Commercial 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 Commercial will offset losses from the drop in Asia Commercial's long position.| IDJ FINANCIAL vs. FIT INVEST JSC | IDJ FINANCIAL vs. Damsan JSC | IDJ FINANCIAL vs. An Phat Plastic | IDJ FINANCIAL vs. Alphanam ME |
| Asia Commercial vs. FIT INVEST JSC | Asia Commercial vs. Damsan JSC | Asia Commercial vs. An Phat Plastic | Asia Commercial vs. Alphanam ME |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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