Correlation Between Puregold Price and Asia United

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

By analyzing existing cross correlation between Puregold Price Club and Asia United Bank, you can compare the effects of market volatilities on Puregold Price and Asia United 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 Puregold Price with a short position of Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puregold Price and Asia United.

Diversification Opportunities for Puregold Price and Asia United

-0.51

Correlation Coefficient

Puregold Price  Asia United

Excellent diversification

The 3 months correlation between Puregold and Asia is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Puregold Price Club and Asia United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia United Bank and Puregold Price 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 Puregold Price Club are associated (or correlated) with Asia United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia United Bank has no effect on the direction of Puregold Price i.e., Puregold Price and Asia United go up and down completely randomly.

Pair Corralation between Puregold Price and Asia United

Assuming the 90 days trading horizon Puregold Price Club is expected to under-perform the Asia United. But the stock apears to be less risky and, when comparing its historical volatility, Puregold Price Club is 1.04 times less risky than Asia United. The stock trades about -0.37 of its potential returns per unit of risk. The Asia United Bank is currently generating about 0.64 of returns per unit of risk over similar time horizon. If you would invest  6,180  in Asia United Bank on October 25, 2024 and sell it today you would earn a total of  1,145  from holding Asia United Bank or generate 18.53% return on investment over 90 days.

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

Puregold Price Club  vs.  Asia United Bank

Puregold Price Club

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Puregold Price Club has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Asia United Bank

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Asia United Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Asia United exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Puregold Price and Asia United

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

The idea behind Puregold Price Club and Asia United Bank 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.