Correlation Between Asiabest Group and Cirtek Holdings

Can any of the company-specific risk be diversified away by investing in both Asiabest Group and Cirtek Holdings 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 Cirtek Holdings 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 Cirtek Holdings Philippines, you can compare the effects of market volatilities on Asiabest Group and Cirtek Holdings 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 Cirtek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiabest Group and Cirtek Holdings.

Diversification Opportunities for Asiabest Group and Cirtek Holdings

-0.35

Correlation Coefficient

Asiabest Group  Cirtek Holdings

Very good diversification

The 3 months correlation between Asiabest and Cirtek is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Asiabest Group International and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil 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 Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Asiabest Group i.e., Asiabest Group and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Asiabest Group and Cirtek Holdings

Assuming the 90 days trading horizon Asiabest Group International is expected to generate 2.07 times more return on investment than Cirtek Holdings. However, Asiabest Group is 2.07 times more volatile than Cirtek Holdings Philippines. It trades about 0.56 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about -0.2 per unit of risk. If you would invest  1,842  in Asiabest Group International on September 28, 2024 and sell it today you would earn a total of  778.00  from holding Asiabest Group International or generate 42.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

Asiabest Group International  vs.  Cirtek Holdings Philippines

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.

Cirtek Holdings Phil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirtek Holdings Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Asiabest Group and Cirtek Holdings

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

The idea behind Asiabest Group International and Cirtek Holdings Philippines 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.