Correlation Between Intai Technology and Air Asia

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

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

Diversification Opportunities for Intai Technology and Air Asia

0.14

Correlation Coefficient

Intai Technology  Air Asia

Average diversification

The 3 months correlation between Intai and Air is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Intai Technology and Air Asia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Asia and Intai Technology 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 Intai Technology are associated (or correlated) with Air Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Asia has no effect on the direction of Intai Technology i.e., Intai Technology and Air Asia go up and down completely randomly.

Pair Corralation between Intai Technology and Air Asia

Assuming the 90 days trading horizon Intai Technology is expected to under-perform the Air Asia. But the stock apears to be less risky and, when comparing its historical volatility, Intai Technology is 1.96 times less risky than Air Asia. The stock trades about -0.01 of its potential returns per unit of risk. The Air Asia Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,516  in Air Asia Co on December 28, 2024 and sell it today you would earn a total of  329.00  from holding Air Asia Co or generate 9.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intai Technology  vs.  Air Asia Co

Intai Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intai Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Intai Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Air Asia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Air Asia Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Air Asia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intai Technology and Air Asia

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

The idea behind Intai Technology and Air Asia 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.