Correlation Between ASA METROPOLIS and ASA RETROFITS

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

By analyzing existing cross correlation between ASA METROPOLIS FUNDO and ASA RETROFITS I, you can compare the effects of market volatilities on ASA METROPOLIS and ASA RETROFITS 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 ASA METROPOLIS with a short position of ASA RETROFITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASA METROPOLIS and ASA RETROFITS.

Diversification Opportunities for ASA METROPOLIS and ASA RETROFITS

0.0

Correlation Coefficient

ASA METROPOLIS  ASA RETROFITS

Pay attention - limited upside

The 3 months correlation between ASA and ASA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASA METROPOLIS FUNDO and ASA RETROFITS I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA RETROFITS I and ASA METROPOLIS 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 ASA METROPOLIS FUNDO are associated (or correlated) with ASA RETROFITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA RETROFITS I has no effect on the direction of ASA METROPOLIS i.e., ASA METROPOLIS and ASA RETROFITS go up and down completely randomly.

Pair Corralation between ASA METROPOLIS and ASA RETROFITS

If you would invest  0.00  in ASA RETROFITS I on October 24, 2024 and sell it today you would earn a total of  0.00  from holding ASA RETROFITS I or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

ASA METROPOLIS FUNDO  vs.  ASA RETROFITS I

ASA METROPOLIS FUNDO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASA METROPOLIS FUNDO has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's primary indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

ASA RETROFITS I

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days ASA RETROFITS I has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, ASA RETROFITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ASA METROPOLIS and ASA RETROFITS

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

The idea behind ASA METROPOLIS FUNDO and ASA RETROFITS I 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.