Correlation Between Educational Book and Asia Commercial
Can any of the company-specific risk be diversified away by investing in both Educational Book and Asia Commercial 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 Educational Book and Asia Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Educational Book In and Asia Commercial Bank, you can compare the effects of market volatilities on Educational Book and Asia Commercial 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 Educational Book with a short position of Asia Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Educational Book and Asia Commercial.
Diversification Opportunities for Educational Book and Asia Commercial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Educational and Asia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Educational Book In and Asia Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Commercial Bank and Educational Book 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 Educational Book In are associated (or correlated) with Asia Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Commercial Bank has no effect on the direction of Educational Book i.e., Educational Book and Asia Commercial go up and down completely randomly.
Pair Corralation between Educational Book and Asia Commercial
Assuming the 90 days trading horizon Educational Book In is expected to generate 0.83 times more return on investment than Asia Commercial. However, Educational Book In is 1.21 times less risky than Asia Commercial. It trades about 0.01 of its potential returns per unit of risk. Asia Commercial Bank is currently generating about -0.2 per unit of risk. If you would invest 1,550,000 in Educational Book In on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Educational Book In or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 66.67% |
Values | Daily Returns |
Educational Book In vs. Asia Commercial Bank
Performance |
Timeline |
Educational Book |
Asia Commercial Bank |
Educational Book and Asia Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Educational Book and Asia Commercial
The main advantage of trading using opposite Educational Book and Asia Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Educational Book position performs unexpectedly, Asia Commercial 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 Asia Commercial will offset losses from the drop in Asia Commercial's long position.Educational Book vs. South Basic Chemicals | Educational Book vs. Telecoms Informatics JSC | Educational Book vs. Sao Ta Foods | Educational Book vs. Japan Vietnam Medical |
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Check out your portfolio center.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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