Correlation Between Sea Air and Asia Commercial
Can any of the company-specific risk be diversified away by investing in both Sea Air and Asia Commercial 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 Sea Air and Asia Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea Air Freight and Asia Commercial Bank, you can compare the effects of market volatilities on Sea Air and Asia Commercial 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 Sea Air with a short position of Asia Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Air and Asia Commercial.
Diversification Opportunities for Sea Air and Asia Commercial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sea and Asia is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sea Air Freight and Asia Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Commercial Bank and Sea Air 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 Sea Air Freight are associated (or correlated) with Asia Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Commercial Bank has no effect on the direction of Sea Air i.e., Sea Air and Asia Commercial go up and down completely randomly.
Pair Corralation between Sea Air and Asia Commercial
Assuming the 90 days trading horizon Sea Air Freight is expected to under-perform the Asia Commercial. In addition to that, Sea Air is 1.9 times more volatile than Asia Commercial Bank. It trades about -0.05 of its total potential returns per unit of risk. Asia Commercial Bank is currently generating about 0.03 per unit of volatility. If you would invest 2,450,000 in Asia Commercial Bank on August 28, 2024 and sell it today you would earn a total of 40,000 from holding Asia Commercial Bank or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.87% |
| Values | Daily Returns |
Sea Air Freight vs. Asia Commercial Bank
Performance |
| Timeline |
| Sea Air Freight |
| Asia Commercial Bank |
Sea Air and Asia Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea Air and Asia Commercial
The main advantage of trading using opposite Sea Air and Asia Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea Air position performs unexpectedly, Asia Commercial 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 Commercial will offset losses from the drop in Asia Commercial's long position.| Sea Air vs. FIT INVEST JSC | Sea Air vs. Damsan JSC | Sea Air vs. An Phat Plastic | Sea Air vs. APG Securities Joint |
| Asia Commercial vs. FIT INVEST JSC | Asia Commercial vs. Damsan JSC | Asia Commercial vs. An Phat Plastic | Asia Commercial vs. APG Securities Joint |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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