Correlation Between IRemit and Crown Asia

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

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

Diversification Opportunities for IRemit and Crown Asia

0.19

Correlation Coefficient

IRemit  Crown Asia

Average diversification

The 3 months correlation between IRemit and Crown is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding IRemit Inc and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals and IRemit 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 IRemit Inc are associated (or correlated) with Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of IRemit i.e., IRemit and Crown Asia go up and down completely randomly.

Pair Corralation between IRemit and Crown Asia

Assuming the 90 days horizon IRemit Inc is expected to under-perform the Crown Asia. In addition to that, IRemit is 4.29 times more volatile than Crown Asia Chemicals. It trades about -0.03 of its total potential returns per unit of risk. Crown Asia Chemicals is currently generating about 0.04 per unit of volatility. If you would invest  138.00  in Crown Asia Chemicals on October 11, 2024 and sell it today you would earn a total of  39.00  from holding Crown Asia Chemicals or generate 28.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	39.83%
Values	Daily Returns

IRemit Inc  vs.  Crown Asia Chemicals

IRemit Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IRemit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Crown Asia Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Asia Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crown Asia is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IRemit and Crown Asia

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

The idea behind IRemit Inc and Crown Asia Chemicals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.