Correlation Between Pan Asia and Newcity Public
Can any of the company-specific risk be diversified away by investing in both Pan Asia and Newcity Public 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 Pan Asia and Newcity Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Asia Footwear and Newcity Public, you can compare the effects of market volatilities on Pan Asia and Newcity Public 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 Pan Asia with a short position of Newcity Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Asia and Newcity Public.
Diversification Opportunities for Pan Asia and Newcity Public
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pan and Newcity is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pan Asia Footwear and Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcity Public and Pan 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 Pan Asia Footwear are associated (or correlated) with Newcity Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcity Public has no effect on the direction of Pan Asia i.e., Pan Asia and Newcity Public go up and down completely randomly.
Pair Corralation between Pan Asia and Newcity Public
Assuming the 90 days trading horizon Pan Asia Footwear is expected to generate 1.0 times more return on investment than Newcity Public. However, Pan Asia Footwear is 1.0 times less risky than Newcity Public. It trades about 0.08 of its potential returns per unit of risk. Newcity Public is currently generating about 0.08 per unit of risk. If you would invest 128.00 in Pan Asia Footwear on September 3, 2024 and sell it today you would lose (26.00) from holding Pan Asia Footwear or give up 20.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Asia Footwear vs. Newcity Public
Performance |
| Timeline |
| Pan Asia Footwear |
| Newcity Public |
Pan Asia and Newcity Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Asia and Newcity Public
The main advantage of trading using opposite Pan Asia and Newcity Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Asia position performs unexpectedly, Newcity Public 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 Newcity Public will offset losses from the drop in Newcity Public's long position.| Pan Asia vs. Central Pattana Public | Pan Asia vs. CP ALL Public | Pan Asia vs. Bangkok Dusit Medical | Pan Asia vs. Airports of Thailand |
| Newcity Public vs. Central Pattana Public | Newcity Public vs. CP ALL Public | Newcity Public vs. Bangkok Dusit Medical | Newcity Public vs. Airports of Thailand |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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