Correlation Between North East and Asian Alliance
Can any of the company-specific risk be diversified away by investing in both North East and Asian Alliance 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 North East and Asian Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North East Rubbers and Asian Alliance International, you can compare the effects of market volatilities on North East and Asian Alliance 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 North East with a short position of Asian Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of North East and Asian Alliance.
Diversification Opportunities for North East and Asian Alliance
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between North and Asian is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding North East Rubbers and Asian Alliance International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Alliance Inter and North East 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 North East Rubbers are associated (or correlated) with Asian Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Alliance Inter has no effect on the direction of North East i.e., North East and Asian Alliance go up and down completely randomly.
Pair Corralation between North East and Asian Alliance
Assuming the 90 days trading horizon North East is expected to generate 14.33 times less return on investment than Asian Alliance. But when comparing it to its historical volatility, North East Rubbers is 1.74 times less risky than Asian Alliance. It trades about 0.0 of its potential returns per unit of risk. Asian Alliance International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 663.00 in Asian Alliance International on September 3, 2024 and sell it today you would lose (98.00) from holding Asian Alliance International or give up 14.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North East Rubbers vs. Asian Alliance International
Performance |
| Timeline |
| North East Rubbers |
| Asian Alliance Inter |
North East and Asian Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North East and Asian Alliance
The main advantage of trading using opposite North East and Asian Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North East position performs unexpectedly, Asian Alliance 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 Asian Alliance will offset losses from the drop in Asian Alliance's long position.| North East vs. Sri Trang Agro Industry | North East vs. Jay Mart Public | North East vs. Com7 PCL | North East vs. Energy Absolute Public |
| Asian Alliance vs. i Tail Corp PCL | Asian Alliance vs. North East Rubbers | Asian Alliance vs. Thai Life Insurance | Asian Alliance vs. Exotic Food 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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