Correlation Between ASIA Capital and ARIP Public

Can any of the company-specific risk be diversified away by investing in both ASIA Capital and ARIP Public 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 Capital and ARIP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for ASIA Capital and ARIP Public

0.0

Correlation Coefficient

ASIA Capital  ARIP Public

Pay attention - limited upside

The 3 months correlation between ASIA and ARIP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASIA Capital Group and ARIP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARIP Public and ASIA Capital 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 Capital Group are associated (or correlated) with ARIP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARIP Public has no effect on the direction of ASIA Capital i.e., ASIA Capital and ARIP Public go up and down completely randomly.

Pair Corralation between ASIA Capital and ARIP Public

Assuming the 90 days trading horizon ASIA Capital Group is expected to under-perform the ARIP Public. In addition to that, ASIA Capital is 2.12 times more volatile than ARIP Public. It trades about -0.13 of its total potential returns per unit of risk. ARIP Public is currently generating about -0.04 per unit of volatility. If you would invest  53.00  in ARIP Public on December 29, 2024 and sell it today you would lose (12.00) from holding ARIP Public or give up 22.64% of portfolio value over 90 days.

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

ASIA Capital Group  vs.  ARIP Public

ASIA Capital Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASIA Capital Group 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 forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ARIP Public

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ASIA Capital and ARIP Public

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

The idea behind ASIA Capital Group and ARIP 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.