Correlation Between Amada and Asian Pay

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Amada and Asian Pay 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 Amada and Asian Pay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amada Co and Asian Pay Television, you can compare the effects of market volatilities on Amada and Asian Pay 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 Amada with a short position of Asian Pay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amada and Asian Pay.

Diversification Opportunities for Amada and Asian Pay

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Amada and Asian is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Amada Co and Asian Pay Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pay Television and Amada 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 Amada Co are associated (or correlated) with Asian Pay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pay Television has no effect on the direction of Amada i.e., Amada and Asian Pay go up and down completely randomly.

Pair Corralation between Amada and Asian Pay

Assuming the 90 days horizon Amada is expected to generate 5.8 times less return on investment than Asian Pay. But when comparing it to its historical volatility, Amada Co is 8.57 times less risky than Asian Pay. It trades about 0.31 of its potential returns per unit of risk. Asian Pay Television is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3.28  in Asian Pay Television on December 30, 2023 and sell it today you would earn a total of  1.72  from holding Asian Pay Television or generate 52.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Amada Co  vs.  Asian Pay Television

 Performance 
       Timeline  
Amada 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Amada Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Amada showed solid returns over the last few months and may actually be approaching a breakup point.
Asian Pay Television 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Asian Pay Television are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Asian Pay reported solid returns over the last few months and may actually be approaching a breakup point.

Amada and Asian Pay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amada and Asian Pay

The main advantage of trading using opposite Amada and Asian Pay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amada position performs unexpectedly, Asian Pay 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 Asian Pay will offset losses from the drop in Asian Pay's long position.
The idea behind Amada Co and Asian Pay Television 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Equity Valuation
Check real value of public entities based on technical and fundamental data
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Bonds Directory
Find actively traded corporate debentures issued by US companies