Correlation Between Asia Medical and INET Leasehold

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

By analyzing existing cross correlation between Asia Medical Agricultural and INET Leasehold REIT, you can compare the effects of market volatilities on Asia Medical and INET Leasehold 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 Medical with a short position of INET Leasehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Medical and INET Leasehold.

Diversification Opportunities for Asia Medical and INET Leasehold

-0.58

Correlation Coefficient

Asia Medical  INET Leasehold

Excellent diversification

The 3 months correlation between Asia and INET is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Asia Medical Agricultural and INET Leasehold REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INET Leasehold REIT and Asia Medical 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 Medical Agricultural are associated (or correlated) with INET Leasehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INET Leasehold REIT has no effect on the direction of Asia Medical i.e., Asia Medical and INET Leasehold go up and down completely randomly.

Pair Corralation between Asia Medical and INET Leasehold

Assuming the 90 days trading horizon Asia Medical Agricultural is expected to under-perform the INET Leasehold. In addition to that, Asia Medical is 2.38 times more volatile than INET Leasehold REIT. It trades about -0.03 of its total potential returns per unit of risk. INET Leasehold REIT is currently generating about 0.1 per unit of volatility. If you would invest  834.00  in INET Leasehold REIT on December 30, 2024 and sell it today you would earn a total of  41.00  from holding INET Leasehold REIT or generate 4.92% return on investment over 90 days.

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

Asia Medical Agricultural  vs.  INET Leasehold REIT

Asia Medical Agricultural

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Medical Agricultural has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Asia Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

INET Leasehold REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INET Leasehold REIT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, INET Leasehold is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Asia Medical and INET Leasehold

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

The idea behind Asia Medical Agricultural and INET Leasehold REIT 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.