Correlation Between Asia Medical and Sahamit Machinery

Can any of the company-specific risk be diversified away by investing in both Asia Medical and Sahamit Machinery 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 Sahamit Machinery 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 Sahamit Machinery Public, you can compare the effects of market volatilities on Asia Medical and Sahamit Machinery 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 Sahamit Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Medical and Sahamit Machinery.

Diversification Opportunities for Asia Medical and Sahamit Machinery

-0.12

Correlation Coefficient

Asia Medical  Sahamit Machinery

Good diversification

The 3 months correlation between Asia and Sahamit is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Asia Medical Agricultural and Sahamit Machinery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sahamit Machinery Public 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 Sahamit Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sahamit Machinery Public has no effect on the direction of Asia Medical i.e., Asia Medical and Sahamit Machinery go up and down completely randomly.

Pair Corralation between Asia Medical and Sahamit Machinery

Assuming the 90 days trading horizon Asia Medical is expected to generate 119.81 times less return on investment than Sahamit Machinery. But when comparing it to its historical volatility, Asia Medical Agricultural is 23.52 times less risky than Sahamit Machinery. It trades about 0.01 of its potential returns per unit of risk. Sahamit Machinery Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  436.00  in Sahamit Machinery Public on September 24, 2024 and sell it today you would lose (40.00) from holding Sahamit Machinery Public or give up 9.17% of portfolio value over 90 days.

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

Asia Medical Agricultural  vs.  Sahamit Machinery Public

Asia Medical Agricultural

Risk-Adjusted Performance

0 of 100

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.

Sahamit Machinery Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sahamit Machinery Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sahamit Machinery is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Asia Medical and Sahamit Machinery

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

The idea behind Asia Medical Agricultural and Sahamit Machinery 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..