Correlation Between Asia Vital and Billion Electric

Can any of the company-specific risk be diversified away by investing in both Asia Vital and Billion Electric 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 Asia Vital and Billion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asia Vital Components and Billion Electric Co, you can compare the effects of market volatilities on Asia Vital and Billion Electric 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 Asia Vital with a short position of Billion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Vital and Billion Electric.

Diversification Opportunities for Asia Vital and Billion Electric

-0.08

Correlation Coefficient

Asia Vital  Billion Electric

Good diversification

The 3 months correlation between Asia and Billion is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Asia Vital Components and Billion Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Billion Electric and Asia Vital 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 Asia Vital Components are associated (or correlated) with Billion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Billion Electric has no effect on the direction of Asia Vital i.e., Asia Vital and Billion Electric go up and down completely randomly.

Pair Corralation between Asia Vital and Billion Electric

Assuming the 90 days trading horizon Asia Vital Components is expected to generate 1.37 times more return on investment than Billion Electric. However, Asia Vital is 1.37 times more volatile than Billion Electric Co. It trades about 0.12 of its potential returns per unit of risk. Billion Electric Co is currently generating about -0.01 per unit of risk. If you would invest  10,950  in Asia Vital Components on October 9, 2024 and sell it today you would earn a total of  51,750  from holding Asia Vital Components or generate 472.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Asia Vital Components  vs.  Billion Electric Co

Asia Vital Components

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Vital Components are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Asia Vital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Billion Electric

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Billion Electric Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Asia Vital and Billion Electric

The main advantage of trading using opposite Asia Vital and Billion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Vital position performs unexpectedly, Billion Electric 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 Billion Electric will offset losses from the drop in Billion Electric's long position.

The idea behind Asia Vital Components and Billion Electric Co 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.