Correlation Between Asia Plus and Jasmine International

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

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

Diversification Opportunities for Asia Plus and Jasmine International

0.22

Correlation Coefficient

Asia Plus  Jasmine International

Modest diversification

The 3 months correlation between Asia and Jasmine is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International and Asia Plus 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 Plus Group are associated (or correlated) with Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of Asia Plus i.e., Asia Plus and Jasmine International go up and down completely randomly.

Pair Corralation between Asia Plus and Jasmine International

Assuming the 90 days trading horizon Asia Plus Group is expected to generate 0.52 times more return on investment than Jasmine International. However, Asia Plus Group is 1.91 times less risky than Jasmine International. It trades about 0.08 of its potential returns per unit of risk. Jasmine International Public is currently generating about -0.04 per unit of risk. If you would invest  226.00  in Asia Plus Group on August 31, 2024 and sell it today you would earn a total of  18.00  from holding Asia Plus Group or generate 7.96% return on investment over 90 days.

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

Asia Plus Group  vs.  Jasmine International Public

Asia Plus Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Plus Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Asia Plus may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Jasmine International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Asia Plus and Jasmine International

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

The idea behind Asia Plus Group and Jasmine International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..