Correlation Between Vibhavadi Medical and Asia Green

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

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

Diversification Opportunities for Vibhavadi Medical and Asia Green

0.91

Correlation Coefficient

Vibhavadi Medical  Asia Green

Almost no diversification

The 3 months correlation between Vibhavadi and Asia is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vibhavadi Medical Center and Asia Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Green Energy and Vibhavadi Medical 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 Vibhavadi Medical Center are associated (or correlated) with Asia Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Green Energy has no effect on the direction of Vibhavadi Medical i.e., Vibhavadi Medical and Asia Green go up and down completely randomly.

Pair Corralation between Vibhavadi Medical and Asia Green

Assuming the 90 days trading horizon Vibhavadi Medical Center is expected to under-perform the Asia Green. But the stock apears to be less risky and, when comparing its historical volatility, Vibhavadi Medical Center is 1.19 times less risky than Asia Green. The stock trades about -0.13 of its potential returns per unit of risk. The Asia Green Energy is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Asia Green Energy on December 2, 2024 and sell it today you would lose (12.00) from holding Asia Green Energy or give up 9.68% of portfolio value over 90 days.

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

Vibhavadi Medical Center  vs.  Asia Green Energy

Vibhavadi Medical Center

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vibhavadi Medical Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Asia Green Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Green Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Vibhavadi Medical and Asia Green

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

The idea behind Vibhavadi Medical Center and Asia Green Energy 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.