Correlation Between Asphere Innovations and Com7 PCL

Can any of the company-specific risk be diversified away by investing in both Asphere Innovations and Com7 PCL 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 Asphere Innovations and Com7 PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asphere Innovations Public and Com7 PCL, you can compare the effects of market volatilities on Asphere Innovations and Com7 PCL 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 Asphere Innovations with a short position of Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asphere Innovations and Com7 PCL.

Diversification Opportunities for Asphere Innovations and Com7 PCL

0.87

Correlation Coefficient

Asphere Innovations  Com7 PCL

Very poor diversification

The 3 months correlation between Asphere and Com7 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Asphere Innovations Public and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL and Asphere Innovations 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 Asphere Innovations Public are associated (or correlated) with Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of Asphere Innovations i.e., Asphere Innovations and Com7 PCL go up and down completely randomly.

Pair Corralation between Asphere Innovations and Com7 PCL

Assuming the 90 days horizon Asphere Innovations Public is expected to under-perform the Com7 PCL. In addition to that, Asphere Innovations is 2.12 times more volatile than Com7 PCL. It trades about -0.2 of its total potential returns per unit of risk. Com7 PCL is currently generating about -0.19 per unit of volatility. If you would invest  2,575  in Com7 PCL on December 3, 2024 and sell it today you would lose (385.00) from holding Com7 PCL or give up 14.95% of portfolio value over 90 days.

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

Asphere Innovations Public  vs.  Com7 PCL

Asphere Innovations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asphere Innovations Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Com7 PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Com7 PCL 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Asphere Innovations and Com7 PCL

The main advantage of trading using opposite Asphere Innovations and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asphere Innovations position performs unexpectedly, Com7 PCL 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 Com7 PCL will offset losses from the drop in Com7 PCL's long position.

The idea behind Asphere Innovations Public and Com7 PCL 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.