Correlation Between Lohakit Metal and Asia Aviation

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

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

Diversification Opportunities for Lohakit Metal and Asia Aviation

0.29

Correlation Coefficient

Lohakit Metal  Asia Aviation

Modest diversification

The 3 months correlation between Lohakit and Asia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal Public and Asia Aviation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Aviation Public and Lohakit Metal 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 Lohakit Metal Public are associated (or correlated) with Asia Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Aviation Public has no effect on the direction of Lohakit Metal i.e., Lohakit Metal and Asia Aviation go up and down completely randomly.

Pair Corralation between Lohakit Metal and Asia Aviation

Assuming the 90 days trading horizon Lohakit Metal Public is expected to under-perform the Asia Aviation. But the stock apears to be less risky and, when comparing its historical volatility, Lohakit Metal Public is 43.28 times less risky than Asia Aviation. The stock trades about -0.02 of its potential returns per unit of risk. The Asia Aviation Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  302.00  in Asia Aviation Public on September 3, 2024 and sell it today you would lose (20.00) from holding Asia Aviation Public or give up 6.62% of portfolio value over 90 days.

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

Lohakit Metal Public  vs.  Asia Aviation Public

Lohakit Metal Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lohakit Metal Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Lohakit Metal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Asia Aviation Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Aviation Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Asia Aviation disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lohakit Metal and Asia Aviation

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

The idea behind Lohakit Metal Public and Asia Aviation Public 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 CEOs Directory module to screen CEOs from public companies around the world.