Correlation Between Spirent Communications and Asiamet Resources
Can any of the company-specific risk be diversified away by investing in both Spirent Communications and Asiamet Resources 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 Spirent Communications and Asiamet Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and Asiamet Resources Limited, you can compare the effects of market volatilities on Spirent Communications and Asiamet Resources 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 Spirent Communications with a short position of Asiamet Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and Asiamet Resources.
Diversification Opportunities for Spirent Communications and Asiamet Resources
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spirent and Asiamet is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and Asiamet Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiamet Resources and Spirent Communications 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 Spirent Communications plc are associated (or correlated) with Asiamet Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiamet Resources has no effect on the direction of Spirent Communications i.e., Spirent Communications and Asiamet Resources go up and down completely randomly.
Pair Corralation between Spirent Communications and Asiamet Resources
Assuming the 90 days trading horizon Spirent Communications plc is expected to generate 0.98 times more return on investment than Asiamet Resources. However, Spirent Communications plc is 1.02 times less risky than Asiamet Resources. It trades about 0.02 of its potential returns per unit of risk. Asiamet Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 16,637 in Spirent Communications plc on September 12, 2024 and sell it today you would earn a total of 1,393 from holding Spirent Communications plc or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Spirent Communications plc vs. Asiamet Resources Limited
Performance |
| Timeline |
| Spirent Communications |
| Asiamet Resources |
Spirent Communications and Asiamet Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and Asiamet Resources
The main advantage of trading using opposite Spirent Communications and Asiamet Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications position performs unexpectedly, Asiamet Resources 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 Asiamet Resources will offset losses from the drop in Asiamet Resources' long position.| Spirent Communications vs. Griffin Mining | Spirent Communications vs. Coeur Mining | Spirent Communications vs. Grieg Seafood | Spirent Communications vs. iShares Physical Silver |
| Asiamet Resources vs. Spire Healthcare Group | Asiamet Resources vs. Spirent Communications plc | Asiamet Resources vs. Cardinal Health | Asiamet Resources vs. Optima Health plc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |