Correlation Between Asia Metal and Concord Securities

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

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

Diversification Opportunities for Asia Metal and Concord Securities

-0.66

Correlation Coefficient

Asia Metal  Concord Securities

Excellent diversification

The 3 months correlation between Asia and Concord is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Industries and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities and Asia Metal 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 Metal Industries are associated (or correlated) with Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Asia Metal i.e., Asia Metal and Concord Securities go up and down completely randomly.

Pair Corralation between Asia Metal and Concord Securities

Assuming the 90 days trading horizon Asia Metal Industries is expected to under-perform the Concord Securities. In addition to that, Asia Metal is 2.1 times more volatile than Concord Securities Co. It trades about -0.15 of its total potential returns per unit of risk. Concord Securities Co is currently generating about 0.14 per unit of volatility. If you would invest  1,395  in Concord Securities Co on November 23, 2024 and sell it today you would earn a total of  100.00  from holding Concord Securities Co or generate 7.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.25%
Values	Daily Returns

Asia Metal Industries  vs.  Concord Securities Co

Asia Metal Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Metal Industries 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 March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Concord Securities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Concord Securities Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Concord Securities may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Asia Metal and Concord Securities

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

The idea behind Asia Metal Industries and Concord Securities 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.