Correlation Between Stock Exchange and Asia Network
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and Asia Network 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 Stock Exchange and Asia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and Asia Network International, you can compare the effects of market volatilities on Stock Exchange and Asia Network 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 Stock Exchange with a short position of Asia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and Asia Network.
Diversification Opportunities for Stock Exchange and Asia Network
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stock and Asia is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and Asia Network International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Network Interna and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with Asia Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Network Interna has no effect on the direction of Stock Exchange i.e., Stock Exchange and Asia Network go up and down completely randomly.
Pair Corralation between Stock Exchange and Asia Network
Assuming the 90 days trading horizon Stock Exchange Of is expected to under-perform the Asia Network. But the index apears to be less risky and, when comparing its historical volatility, Stock Exchange Of is 91.95 times less risky than Asia Network. The index trades about -0.03 of its potential returns per unit of risk. The Asia Network International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 493.00 in Asia Network International on August 27, 2024 and sell it today you would lose (99.00) from holding Asia Network International or give up 20.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 48.34% |
| Values | Daily Returns |
Stock Exchange Of vs. Asia Network International
Performance |
| Timeline |
Stock Exchange and Asia Network Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
Asia Network International
Pair trading matchups for Asia Network
Pair Trading with Stock Exchange and Asia Network
The main advantage of trading using opposite Stock Exchange and Asia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, Asia Network 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 Network will offset losses from the drop in Asia Network's long position.| Stock Exchange vs. Warrix Sport PCL | Stock Exchange vs. WHA Utilities and | Stock Exchange vs. WHA Industrial Leasehold | Stock Exchange vs. Healthlead Public |
| Asia Network vs. Delta Electronics Public | Asia Network vs. Delta Electronics Public | Asia Network vs. Airports of Thailand | Asia Network 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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