Correlation Between Asia Sermkij and Newcity Public

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

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

Diversification Opportunities for Asia Sermkij and Newcity Public

0.1

Correlation Coefficient

Asia Sermkij  Newcity Public

Average diversification

The 3 months correlation between Asia and Newcity is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Asia Sermkij Leasing and Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcity Public and Asia Sermkij 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 Sermkij Leasing are associated (or correlated) with Newcity Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcity Public has no effect on the direction of Asia Sermkij i.e., Asia Sermkij and Newcity Public go up and down completely randomly.

Pair Corralation between Asia Sermkij and Newcity Public

Assuming the 90 days trading horizon Asia Sermkij Leasing is expected to under-perform the Newcity Public. But the stock apears to be less risky and, when comparing its historical volatility, Asia Sermkij Leasing is 1.61 times less risky than Newcity Public. The stock trades about -0.19 of its potential returns per unit of risk. The Newcity Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  234.00  in Newcity Public on December 28, 2024 and sell it today you would earn a total of  6.00  from holding Newcity Public or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Asia Sermkij Leasing  vs.  Newcity Public

Asia Sermkij Leasing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Sermkij Leasing 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.

Newcity Public

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Newcity Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Newcity Public may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Asia Sermkij and Newcity Public

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

The idea behind Asia Sermkij Leasing and Newcity 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.