Correlation Between Advance Information and Asia Media

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Can any of the company-specific risk be diversified away by investing in both Advance Information and Asia Media 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 Advance Information and Asia Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Information Marketing and Asia Media Group, you can compare the effects of market volatilities on Advance Information and Asia Media 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 Advance Information with a short position of Asia Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Information and Asia Media.

Diversification Opportunities for Advance Information and Asia Media

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Advance and Asia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Advance Information Marketing and Asia Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Media Group and Advance Information 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 Advance Information Marketing are associated (or correlated) with Asia Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Media Group has no effect on the direction of Advance Information i.e., Advance Information and Asia Media go up and down completely randomly.

Pair Corralation between Advance Information and Asia Media

Assuming the 90 days trading horizon Advance Information Marketing is expected to generate 0.52 times more return on investment than Asia Media. However, Advance Information Marketing is 1.93 times less risky than Asia Media. It trades about 0.09 of its potential returns per unit of risk. Asia Media Group is currently generating about -0.05 per unit of risk. If you would invest  6.50  in Advance Information Marketing on September 5, 2024 and sell it today you would earn a total of  0.50  from holding Advance Information Marketing or generate 7.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Advance Information Marketing  vs.  Asia Media Group

 Performance 
       Timeline  
Advance Information 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Advance Information Marketing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Advance Information may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Asia Media Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Asia Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Advance Information and Asia Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Advance Information and Asia Media

The main advantage of trading using opposite Advance Information and Asia Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Information position performs unexpectedly, Asia Media 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 Media will offset losses from the drop in Asia Media's long position.
The idea behind Advance Information Marketing and Asia Media Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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