Correlation Between RB FOOD and Asian Alliance
Can any of the company-specific risk be diversified away by investing in both RB FOOD 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 RB FOOD and Asian Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RB FOOD SUPPLY and Asian Alliance International, you can compare the effects of market volatilities on RB FOOD 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 RB FOOD with a short position of Asian Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB FOOD and Asian Alliance.
Diversification Opportunities for RB FOOD and Asian Alliance
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RBF-R and Asian is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding RB FOOD SUPPLY 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 RB FOOD 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 RB FOOD SUPPLY 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 RB FOOD i.e., RB FOOD and Asian Alliance go up and down completely randomly.
Pair Corralation between RB FOOD and Asian Alliance
Assuming the 90 days trading horizon RB FOOD SUPPLY is expected to under-perform the Asian Alliance. In addition to that, RB FOOD is 5.15 times more volatile than Asian Alliance International. It trades about -0.14 of its total potential returns per unit of risk. Asian Alliance International is currently generating about -0.12 per unit of volatility. If you would invest 615.00 in Asian Alliance International on September 5, 2024 and sell it today you would lose (35.00) from holding Asian Alliance International or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RB FOOD SUPPLY vs. Asian Alliance International
Performance |
| Timeline |
| RB FOOD SUPPLY |
| Asian Alliance Inter |
RB FOOD and Asian Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RB FOOD and Asian Alliance
The main advantage of trading using opposite RB FOOD and Asian Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RB FOOD 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.| RB FOOD vs. Kingsmen CMTI Public | RB FOOD vs. Hydrotek Public | RB FOOD vs. Karmarts Public | RB FOOD vs. KC Metalsheet Public |
| Asian Alliance vs. Kingsmen CMTI Public | Asian Alliance vs. Hydrotek Public | Asian Alliance vs. Karmarts Public | Asian Alliance vs. KC Metalsheet 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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