Correlation Between Ditto Public and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Ditto Public and Asia Metal 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 Ditto Public and Asia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ditto Public and Asia Metal Public, you can compare the effects of market volatilities on Ditto Public and Asia Metal 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 Ditto Public with a short position of Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ditto Public and Asia Metal.
Diversification Opportunities for Ditto Public and Asia Metal
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ditto and Asia is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ditto Public and Asia Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Public and Ditto Public 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 Ditto Public are associated (or correlated) with Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Public has no effect on the direction of Ditto Public i.e., Ditto Public and Asia Metal go up and down completely randomly.
Pair Corralation between Ditto Public and Asia Metal
Assuming the 90 days trading horizon Ditto Public is expected to generate 2.36 times more return on investment than Asia Metal. However, Ditto Public is 2.36 times more volatile than Asia Metal Public. It trades about -0.05 of its potential returns per unit of risk. Asia Metal Public is currently generating about -0.16 per unit of risk. If you would invest 1,930 in Ditto Public on September 12, 2024 and sell it today you would lose (210.00) from holding Ditto Public or give up 10.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.39% |
Values | Daily Returns |
Ditto Public vs. Asia Metal Public
Performance |
Timeline |
Ditto Public |
Asia Metal Public |
Ditto Public and Asia Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ditto Public and Asia Metal
The main advantage of trading using opposite Ditto Public and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ditto Public position performs unexpectedly, Asia Metal 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 Metal will offset losses from the drop in Asia Metal's long position.Ditto Public vs. Dohome Public | Ditto Public vs. Beryl 8 Plus | Ditto Public vs. Forth Public | Ditto Public vs. Delta Electronics Public |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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