Correlation Between Nickel Asia and Crown Asia
Can any of the company-specific risk be diversified away by investing in both Nickel Asia and Crown Asia 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 Nickel Asia and Crown Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nickel Asia Corp and Crown Asia Chemicals, you can compare the effects of market volatilities on Nickel Asia and Crown Asia 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 Nickel Asia with a short position of Crown Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Asia and Crown Asia.
Diversification Opportunities for Nickel Asia and Crown Asia
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nickel and Crown is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Asia Corp and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals and Nickel Asia 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 Nickel Asia Corp are associated (or correlated) with Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of Nickel Asia i.e., Nickel Asia and Crown Asia go up and down completely randomly.
Pair Corralation between Nickel Asia and Crown Asia
Assuming the 90 days trading horizon Nickel Asia Corp is expected to under-perform the Crown Asia. In addition to that, Nickel Asia is 1.17 times more volatile than Crown Asia Chemicals. It trades about -0.03 of its total potential returns per unit of risk. Crown Asia Chemicals is currently generating about -0.01 per unit of volatility. If you would invest 187.00 in Crown Asia Chemicals on September 12, 2024 and sell it today you would lose (5.00) from holding Crown Asia Chemicals or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nickel Asia Corp vs. Crown Asia Chemicals
Performance |
| Timeline |
| Nickel Asia Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Crown Asia Chemicals |
Nickel Asia and Crown Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Asia and Crown Asia
The main advantage of trading using opposite Nickel Asia and Crown Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Asia position performs unexpectedly, Crown Asia 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 Crown Asia will offset losses from the drop in Crown Asia's long position.| Nickel Asia vs. Lepanto Consolidated Mining | Nickel Asia vs. Apex Mining Co | Nickel Asia vs. SM Investments Corp | Nickel Asia vs. Atlas Consolidated Mining |
| Crown Asia vs. DL Industries | Crown Asia vs. Allhome Corp | Crown Asia vs. LFM Properties Corp | Crown Asia vs. Altus Property Ventures |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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