Correlation Between I Tail and Asian Alliance

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

By analyzing existing cross correlation between i Tail Corp PCL and Asian Alliance International, you can compare the effects of market volatilities on I Tail and Asian Alliance 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 I Tail with a short position of Asian Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tail and Asian Alliance.

Diversification Opportunities for I Tail and Asian Alliance

0.88

Correlation Coefficient

I Tail  Asian Alliance

Very poor diversification

The 3 months correlation between ITC and Asian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding i Tail Corp PCL and Asian Alliance International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Alliance Inter and I Tail 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 i Tail Corp PCL are associated (or correlated) with Asian Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Alliance Inter has no effect on the direction of I Tail i.e., I Tail and Asian Alliance go up and down completely randomly.

Pair Corralation between I Tail and Asian Alliance

Assuming the 90 days trading horizon i Tail Corp PCL is expected to under-perform the Asian Alliance. In addition to that, I Tail is 1.11 times more volatile than Asian Alliance International. It trades about -0.24 of its total potential returns per unit of risk. Asian Alliance International is currently generating about -0.13 per unit of volatility. If you would invest  665.00  in Asian Alliance International on October 25, 2024 and sell it today you would lose (115.00) from holding Asian Alliance International or give up 17.29% of portfolio value over 90 days.

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

i Tail Corp PCL  vs.  Asian Alliance International

i Tail Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days i Tail Corp PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Asian Alliance Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asian Alliance International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with I Tail and Asian Alliance

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

The idea behind i Tail Corp PCL and Asian Alliance International 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.