Correlation Between AIRA Capital and ASN Broker

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

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

Diversification Opportunities for AIRA Capital and ASN Broker

-0.31

Correlation Coefficient

AIRA Capital  ASN Broker

Very good diversification

The 3 months correlation between AIRA and ASN is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding AIRA Capital Public and ASN Broker Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASN Broker Public and AIRA 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 AIRA Capital Public are associated (or correlated) with ASN Broker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASN Broker Public has no effect on the direction of AIRA Capital i.e., AIRA Capital and ASN Broker go up and down completely randomly.

Pair Corralation between AIRA Capital and ASN Broker

Assuming the 90 days trading horizon AIRA Capital Public is expected to generate 0.99 times more return on investment than ASN Broker. However, AIRA Capital Public is 1.01 times less risky than ASN Broker. It trades about 0.17 of its potential returns per unit of risk. ASN Broker Public is currently generating about -0.02 per unit of risk. If you would invest  114.00  in AIRA Capital Public on September 25, 2024 and sell it today you would earn a total of  14.00  from holding AIRA Capital Public or generate 12.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

AIRA Capital Public  vs.  ASN Broker Public

AIRA Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIRA Capital 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ASN Broker Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASN Broker Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, ASN Broker disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AIRA Capital and ASN Broker

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

The idea behind AIRA Capital Public and ASN Broker 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.