Correlation Between Asiabest Group and Crown Asia

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

By analyzing existing cross correlation between Asiabest Group International and Crown Asia Chemicals, you can compare the effects of market volatilities on Asiabest Group and Crown 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 Asiabest Group with a short position of Crown Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiabest Group and Crown Asia.

Diversification Opportunities for Asiabest Group and Crown Asia

-0.8

Correlation Coefficient

Asiabest Group  Crown Asia

Pay attention - limited upside

The 3 months correlation between Asiabest and Crown is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Asiabest Group International and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals and Asiabest Group 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 Asiabest Group International are associated (or correlated) with Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of Asiabest Group i.e., Asiabest Group and Crown Asia go up and down completely randomly.

Pair Corralation between Asiabest Group and Crown Asia

If you would invest  2,620  in Asiabest Group International on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Asiabest Group International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	12.5%
Values	Daily Returns

Asiabest Group International  vs.  Crown Asia Chemicals

Asiabest Group Inter

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days Asiabest Group International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, Asiabest Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Crown Asia Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Asia Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crown Asia is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Asiabest Group and Crown Asia

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

The idea behind Asiabest Group International and Crown Asia Chemicals 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 CEOs Directory module to screen CEOs from public companies around the world.