Correlation Between Asia Biomass and AIRA Factoring

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

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

Diversification Opportunities for Asia Biomass and AIRA Factoring

-0.27

Correlation Coefficient

Asia Biomass  AIRA Factoring

Very good diversification

The 3 months correlation between Asia and AIRA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Asia Biomass Public and AIRA Factoring Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRA Factoring Public and Asia Biomass 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 Biomass Public are associated (or correlated) with AIRA Factoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRA Factoring Public has no effect on the direction of Asia Biomass i.e., Asia Biomass and AIRA Factoring go up and down completely randomly.

Pair Corralation between Asia Biomass and AIRA Factoring

Assuming the 90 days trading horizon Asia Biomass Public is expected to generate 13.06 times more return on investment than AIRA Factoring. However, Asia Biomass is 13.06 times more volatile than AIRA Factoring Public. It trades about 0.05 of its potential returns per unit of risk. AIRA Factoring Public is currently generating about -0.02 per unit of risk. If you would invest  145.00  in Asia Biomass Public on September 28, 2024 and sell it today you would lose (37.00) from holding Asia Biomass Public or give up 25.52% of portfolio value over 90 days.

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

Asia Biomass Public  vs.  AIRA Factoring Public

Asia Biomass Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Biomass Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

AIRA Factoring Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIRA Factoring Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, AIRA Factoring is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Asia Biomass and AIRA Factoring

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

The idea behind Asia Biomass Public and AIRA Factoring Public 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.