Correlation Between ASSGENERALI ADR and COFCO Joycome

Can any of the company-specific risk be diversified away by investing in both ASSGENERALI ADR and COFCO Joycome 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 ASSGENERALI ADR and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASSGENERALI ADR 12EO and COFCO Joycome Foods, you can compare the effects of market volatilities on ASSGENERALI ADR and COFCO Joycome 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 ASSGENERALI ADR with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSGENERALI ADR and COFCO Joycome.

Diversification Opportunities for ASSGENERALI ADR and COFCO Joycome

-0.48

Correlation Coefficient

ASSGENERALI ADR  COFCO Joycome

Very good diversification

The 3 months correlation between ASSGENERALI and COFCO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ASSGENERALI ADR 12EO and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and ASSGENERALI ADR 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 ASSGENERALI ADR 12EO are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of ASSGENERALI ADR i.e., ASSGENERALI ADR and COFCO Joycome go up and down completely randomly.

Pair Corralation between ASSGENERALI ADR and COFCO Joycome

Assuming the 90 days trading horizon ASSGENERALI ADR 12EO is expected to generate 0.54 times more return on investment than COFCO Joycome. However, ASSGENERALI ADR 12EO is 1.86 times less risky than COFCO Joycome. It trades about 0.13 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.05 per unit of risk. If you would invest  1,280  in ASSGENERALI ADR 12EO on October 26, 2024 and sell it today you would earn a total of  170.00  from holding ASSGENERALI ADR 12EO or generate 13.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

ASSGENERALI ADR 12EO  vs.  COFCO Joycome Foods

ASSGENERALI ADR 12EO

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASSGENERALI ADR 12EO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, ASSGENERALI ADR reported solid returns over the last few months and may actually be approaching a breakup point.

COFCO Joycome Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COFCO Joycome Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ASSGENERALI ADR and COFCO Joycome

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

The idea behind ASSGENERALI ADR 12EO and COFCO Joycome Foods 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.