Correlation Between NAT ABSOLUTE and ASIA Capital
Can any of the company-specific risk be diversified away by investing in both NAT ABSOLUTE and ASIA Capital 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 NAT ABSOLUTE and ASIA Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAT ABSOLUTE TECHNOLOGIES and ASIA Capital Group, you can compare the effects of market volatilities on NAT ABSOLUTE and ASIA Capital 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 NAT ABSOLUTE with a short position of ASIA Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAT ABSOLUTE and ASIA Capital.
Diversification Opportunities for NAT ABSOLUTE and ASIA Capital
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NAT and ASIA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES and ASIA Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASIA Capital Group and NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES are associated (or correlated) with ASIA Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASIA Capital Group has no effect on the direction of NAT ABSOLUTE i.e., NAT ABSOLUTE and ASIA Capital go up and down completely randomly.
Pair Corralation between NAT ABSOLUTE and ASIA Capital
Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to under-perform the ASIA Capital. But the stock apears to be less risky and, when comparing its historical volatility, NAT ABSOLUTE TECHNOLOGIES is 45.4 times less risky than ASIA Capital. The stock trades about -0.04 of its potential returns per unit of risk. The ASIA Capital Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 33.00 in ASIA Capital Group on September 1, 2024 and sell it today you would lose (33.00) from holding ASIA Capital Group or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAT ABSOLUTE TECHNOLOGIES vs. ASIA Capital Group
Performance |
| Timeline |
| NAT ABSOLUTE TECHNOLOGIES |
| ASIA Capital Group |
NAT ABSOLUTE and ASIA Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAT ABSOLUTE and ASIA Capital
The main advantage of trading using opposite NAT ABSOLUTE and ASIA Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAT ABSOLUTE position performs unexpectedly, ASIA Capital 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 Capital will offset losses from the drop in ASIA Capital's long position.| NAT ABSOLUTE vs. WHA Industrial Leasehold | NAT ABSOLUTE vs. Heng Leasing Capital | NAT ABSOLUTE vs. PINTHONG INDUSTRIAL PARK | NAT ABSOLUTE vs. Sriracha Construction Public |
| ASIA Capital vs. East Coast Furnitech | ASIA Capital vs. Filter Vision Public | ASIA Capital vs. Cho Thavee Public | ASIA Capital vs. Akkhie Prakarn 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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