Correlation Between Asia Plus and Finansa Public

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

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

Diversification Opportunities for Asia Plus and Finansa Public

0.75

Correlation Coefficient

Asia Plus  Finansa Public

Poor diversification

The 3 months correlation between Asia and Finansa is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Finansa Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finansa Public and Asia Plus 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 Asia Plus Group are associated (or correlated) with Finansa Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finansa Public has no effect on the direction of Asia Plus i.e., Asia Plus and Finansa Public go up and down completely randomly.

Pair Corralation between Asia Plus and Finansa Public

Assuming the 90 days trading horizon Asia Plus Group is expected to under-perform the Finansa Public. But the stock apears to be less risky and, when comparing its historical volatility, Asia Plus Group is 53.58 times less risky than Finansa Public. The stock trades about -0.02 of its potential returns per unit of risk. The Finansa Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  362.00  in Finansa Public on September 14, 2024 and sell it today you would lose (162.00) from holding Finansa Public or give up 44.75% of portfolio value over 90 days.

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

Asia Plus Group  vs.  Finansa Public

Asia Plus Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Plus Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Asia Plus is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Finansa Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finansa 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 basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Asia Plus and Finansa Public

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

The idea behind Asia Plus Group and Finansa 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.