Correlation Between Concepcion Industrial and Asia United

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Can any of the company-specific risk be diversified away by investing in both Concepcion Industrial 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 Concepcion Industrial and Asia United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concepcion Industrial Corp and Asia United Bank, you can compare the effects of market volatilities on Concepcion Industrial 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 Concepcion Industrial with a short position of Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concepcion Industrial and Asia United.

Diversification Opportunities for Concepcion Industrial and Asia United

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Concepcion and Asia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp 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 Concepcion Industrial 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 Concepcion Industrial Corp 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 Concepcion Industrial i.e., Concepcion Industrial and Asia United go up and down completely randomly.

Pair Corralation between Concepcion Industrial and Asia United

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to under-perform the Asia United. In addition to that, Concepcion Industrial is 1.83 times more volatile than Asia United Bank. It trades about -0.08 of its total potential returns per unit of risk. Asia United Bank is currently generating about 0.05 per unit of volatility. If you would invest  6,190  in Asia United Bank on September 5, 2024 and sell it today you would earn a total of  60.00  from holding Asia United Bank or generate 0.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Concepcion Industrial Corp  vs.  Asia United Bank

 Performance 
       Timeline  
Concepcion Industrial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Concepcion Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Concepcion Industrial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Asia United Bank 

Risk-Adjusted Performance

24 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Asia United Bank are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Asia United exhibited solid returns over the last few months and may actually be approaching a breakup point.

Concepcion Industrial and Asia United Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Concepcion Industrial and Asia United

The main advantage of trading using opposite Concepcion Industrial and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial 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 Concepcion Industrial Corp 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.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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