Correlation Between Asiabest Group and Swift Foods

Can any of the company-specific risk be diversified away by investing in both Asiabest Group and Swift Foods 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 Asiabest Group and Swift Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asiabest Group International and Swift Foods, you can compare the effects of market volatilities on Asiabest Group and Swift Foods 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 Asiabest Group with a short position of Swift Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiabest Group and Swift Foods.

Diversification Opportunities for Asiabest Group and Swift Foods

-0.51

Correlation Coefficient

Asiabest Group  Swift Foods

Excellent diversification

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

Pair Corralation between Asiabest Group and Swift Foods

Assuming the 90 days trading horizon Asiabest Group International is expected to generate 1.58 times more return on investment than Swift Foods. However, Asiabest Group is 1.58 times more volatile than Swift Foods. It trades about 0.31 of its potential returns per unit of risk. Swift Foods is currently generating about -0.01 per unit of risk. If you would invest  548.00  in Asiabest Group International on September 25, 2024 and sell it today you would earn a total of  2,072  from holding Asiabest Group International or generate 378.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	69.91%
Values	Daily Returns

Asiabest Group International  vs.  Swift Foods

Asiabest Group Inter

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days Asiabest Group International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, Asiabest Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Swift Foods

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swift Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Swift Foods is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Asiabest Group and Swift Foods

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

The idea behind Asiabest Group International and Swift Foods 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.