Correlation Between Sriracha Construction and Asia Medical

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

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

Diversification Opportunities for Sriracha Construction and Asia Medical

-0.36

Correlation Coefficient

Sriracha Construction  Asia Medical

Very good diversification

The 3 months correlation between Sriracha and Asia is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sriracha Construction Public and Asia Medical Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Medical Agricultural and Sriracha Construction 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 Sriracha Construction Public are associated (or correlated) with Asia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Medical Agricultural has no effect on the direction of Sriracha Construction i.e., Sriracha Construction and Asia Medical go up and down completely randomly.

Pair Corralation between Sriracha Construction and Asia Medical

Assuming the 90 days trading horizon Sriracha Construction Public is expected to under-perform the Asia Medical. But the stock apears to be less risky and, when comparing its historical volatility, Sriracha Construction Public is 2.6 times less risky than Asia Medical. The stock trades about -0.1 of its potential returns per unit of risk. The Asia Medical Agricultural is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  130.00  in Asia Medical Agricultural on September 13, 2024 and sell it today you would earn a total of  8.00  from holding Asia Medical Agricultural or generate 6.15% return on investment over 90 days.

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

Sriracha Construction Public  vs.  Asia Medical Agricultural

Sriracha Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sriracha Construction Public 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 somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Asia Medical Agricultural

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Medical Agricultural has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Asia Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sriracha Construction and Asia Medical

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

The idea behind Sriracha Construction Public and Asia Medical Agricultural 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.