Correlation Between NForce Secure and Asia Medical

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

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

Diversification Opportunities for NForce Secure and Asia Medical

-0.18

Correlation Coefficient

NForce Secure  Asia Medical

Good diversification

The 3 months correlation between NForce and Asia is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding nForce Secure 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 NForce Secure 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 nForce Secure 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 NForce Secure i.e., NForce Secure and Asia Medical go up and down completely randomly.

Pair Corralation between NForce Secure and Asia Medical

Assuming the 90 days trading horizon nForce Secure Public is expected to generate 0.69 times more return on investment than Asia Medical. However, nForce Secure Public is 1.45 times less risky than Asia Medical. It trades about 0.04 of its potential returns per unit of risk. Asia Medical Agricultural is currently generating about -0.09 per unit of risk. If you would invest  1,230  in nForce Secure Public on September 15, 2024 and sell it today you would earn a total of  10.00  from holding nForce Secure Public or generate 0.81% return on investment over 90 days.

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

nForce Secure Public  vs.  Asia Medical Agricultural

nForce Secure Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days nForce Secure Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains 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 NForce Secure and Asia Medical

The main advantage of trading using opposite NForce Secure and Asia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NForce Secure 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 nForce Secure 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 Commodity Directory module to find actively traded commodities issued by global exchanges.