Correlation Between Precious Shipping and Asia Aviation
Can any of the company-specific risk be diversified away by investing in both Precious Shipping and Asia Aviation 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 Precious Shipping and Asia Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Shipping Public and Asia Aviation Public, you can compare the effects of market volatilities on Precious Shipping and Asia Aviation 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 Precious Shipping with a short position of Asia Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Shipping and Asia Aviation.
Diversification Opportunities for Precious Shipping and Asia Aviation
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Precious and Asia is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Precious Shipping Public and Asia Aviation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Aviation Public and Precious Shipping 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 Precious Shipping Public are associated (or correlated) with Asia Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Aviation Public has no effect on the direction of Precious Shipping i.e., Precious Shipping and Asia Aviation go up and down completely randomly.
Pair Corralation between Precious Shipping and Asia Aviation
Assuming the 90 days trading horizon Precious Shipping Public is expected to under-perform the Asia Aviation. But the stock apears to be less risky and, when comparing its historical volatility, Precious Shipping Public is 1.44 times less risky than Asia Aviation. The stock trades about -0.42 of its potential returns per unit of risk. The Asia Aviation Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Asia Aviation Public on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Asia Aviation Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precious Shipping Public vs. Asia Aviation Public
Performance |
| Timeline |
| Precious Shipping Public |
| Asia Aviation Public |
Precious Shipping and Asia Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precious Shipping and Asia Aviation
The main advantage of trading using opposite Precious Shipping and Asia Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Shipping position performs unexpectedly, Asia Aviation 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 Aviation will offset losses from the drop in Asia Aviation's long position.| Precious Shipping vs. Thoresen Thai Agencies | Precious Shipping vs. Regional Container Lines | Precious Shipping vs. The Siam Cement | Precious Shipping vs. PTT Public |
| Asia Aviation vs. Airports of Thailand | Asia Aviation vs. Bangkok Expressway and | Asia Aviation vs. BTS Group Holdings | Asia Aviation vs. Bangkok Airways 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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