Correlation Between Integrated Rail and Generation Asia

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

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

Diversification Opportunities for Integrated Rail and Generation Asia

0.0

Correlation Coefficient

Integrated Rail  Generation Asia

Pay attention - limited upside

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

Pair Corralation between Integrated Rail and Generation Asia

If you would invest (100.00) in Generation Asia I on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Generation Asia I or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Integrated Rail and  vs.  Generation Asia I

Integrated Rail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Rail and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Integrated Rail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Generation Asia I

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Integrated Rail and Generation Asia

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

The idea behind Integrated Rail and and Generation Asia 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.