Correlation Between Cowealth Medical and Asia Metal

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

By analyzing existing cross correlation between Cowealth Medical Holding and Asia Metal Industries, you can compare the effects of market volatilities on Cowealth Medical and Asia Metal 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 Cowealth Medical with a short position of Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cowealth Medical and Asia Metal.

Diversification Opportunities for Cowealth Medical and Asia Metal

-0.12

Correlation Coefficient

Cowealth Medical  Asia Metal

Good diversification

The 3 months correlation between Cowealth and Asia is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cowealth Medical Holding and Asia Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Industries and Cowealth Medical 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 Cowealth Medical Holding are associated (or correlated) with Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Industries has no effect on the direction of Cowealth Medical i.e., Cowealth Medical and Asia Metal go up and down completely randomly.

Pair Corralation between Cowealth Medical and Asia Metal

Assuming the 90 days trading horizon Cowealth Medical Holding is expected to generate 0.46 times more return on investment than Asia Metal. However, Cowealth Medical Holding is 2.18 times less risky than Asia Metal. It trades about -0.13 of its potential returns per unit of risk. Asia Metal Industries is currently generating about -0.09 per unit of risk. If you would invest  2,080  in Cowealth Medical Holding on October 10, 2024 and sell it today you would lose (45.00) from holding Cowealth Medical Holding or give up 2.16% of portfolio value over 90 days.

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

Cowealth Medical Holding  vs.  Asia Metal Industries

Cowealth Medical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cowealth Medical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Asia Metal Industries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Metal Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Asia Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cowealth Medical and Asia Metal

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

The idea behind Cowealth Medical Holding and Asia Metal Industries 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.