Correlation Between THORNEY TECHS and ASOS PLC
Can any of the company-specific risk be diversified away by investing in both THORNEY TECHS and ASOS PLC 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 THORNEY TECHS and ASOS PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THORNEY TECHS LTD and ASOS PLC, you can compare the effects of market volatilities on THORNEY TECHS and ASOS PLC 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 THORNEY TECHS with a short position of ASOS PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and ASOS PLC.
Diversification Opportunities for THORNEY TECHS and ASOS PLC
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between THORNEY and ASOS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and ASOS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS PLC and THORNEY TECHS 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 THORNEY TECHS LTD are associated (or correlated) with ASOS PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS PLC has no effect on the direction of THORNEY TECHS i.e., THORNEY TECHS and ASOS PLC go up and down completely randomly.
Pair Corralation between THORNEY TECHS and ASOS PLC
Assuming the 90 days horizon THORNEY TECHS LTD is expected to under-perform the ASOS PLC. In addition to that, THORNEY TECHS is 1.22 times more volatile than ASOS PLC. It trades about -0.05 of its total potential returns per unit of risk. ASOS PLC is currently generating about 0.26 per unit of volatility. If you would invest 405.00 in ASOS PLC on September 13, 2024 and sell it today you would earn a total of 69.00 from holding ASOS PLC or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
THORNEY TECHS LTD vs. ASOS PLC
Performance |
| Timeline |
| THORNEY TECHS LTD |
| ASOS PLC |
THORNEY TECHS and ASOS PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THORNEY TECHS and ASOS PLC
The main advantage of trading using opposite THORNEY TECHS and ASOS PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS position performs unexpectedly, ASOS PLC 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 ASOS PLC will offset losses from the drop in ASOS PLC's long position.| THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc |
| ASOS PLC vs. ELECTRONIC ARTS | ASOS PLC vs. HF SINCLAIR P | ASOS PLC vs. Methode Electronics | ASOS PLC vs. STMicroelectronics NV |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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