Correlation Between Amanah Leasing and Asia Fiber

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

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

Diversification Opportunities for Amanah Leasing and Asia Fiber

0.9

Correlation Coefficient

Amanah Leasing  Asia Fiber

Almost no diversification

The 3 months correlation between Amanah and Asia is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amanah Leasing Public and Asia Fiber Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Fiber Public and Amanah Leasing 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 Amanah Leasing Public are associated (or correlated) with Asia Fiber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Fiber Public has no effect on the direction of Amanah Leasing i.e., Amanah Leasing and Asia Fiber go up and down completely randomly.

Pair Corralation between Amanah Leasing and Asia Fiber

Assuming the 90 days trading horizon Amanah Leasing is expected to generate 1.0 times less return on investment than Asia Fiber. But when comparing it to its historical volatility, Amanah Leasing Public is 1.0 times less risky than Asia Fiber. It trades about 0.08 of its potential returns per unit of risk. Asia Fiber Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Asia Fiber Public on September 25, 2024 and sell it today you would lose (28.00) from holding Asia Fiber Public or give up 5.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.18%
Values	Daily Returns

Amanah Leasing Public  vs.  Asia Fiber Public

Amanah Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amanah Leasing 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Asia Fiber Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Fiber Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Amanah Leasing and Asia Fiber

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

The idea behind Amanah Leasing Public and Asia Fiber 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.

Check out your portfolio center.

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 Global Correlations module to find global opportunities by holding instruments from different markets.