Correlation Between Asahi Kasei and Altech Batteries

Can any of the company-specific risk be diversified away by investing in both Asahi Kasei and Altech Batteries 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 Asahi Kasei and Altech Batteries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asahi Kasei and Altech Batteries Limited, you can compare the effects of market volatilities on Asahi Kasei and Altech Batteries 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 Asahi Kasei with a short position of Altech Batteries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asahi Kasei and Altech Batteries.

Diversification Opportunities for Asahi Kasei and Altech Batteries

0.0

Correlation Coefficient

Asahi Kasei  Altech Batteries

Pay attention - limited upside

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

Pair Corralation between Asahi Kasei and Altech Batteries

If you would invest (100.00) in Asahi Kasei on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Asahi Kasei or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Asahi Kasei  vs.  Altech Batteries Limited

Asahi Kasei

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asahi Kasei has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Asahi Kasei is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Altech Batteries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altech Batteries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Altech Batteries is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Asahi Kasei and Altech Batteries

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

The idea behind Asahi Kasei and Altech Batteries Limited 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.