Correlation Between Asset World and Silicon Craft
Can any of the company-specific risk be diversified away by investing in both Asset World and Silicon Craft 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 Asset World and Silicon Craft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asset World Corp and Silicon Craft Technology, you can compare the effects of market volatilities on Asset World and Silicon Craft 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 Asset World with a short position of Silicon Craft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asset World and Silicon Craft.
Diversification Opportunities for Asset World and Silicon Craft
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asset and Silicon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Asset World Corp and Silicon Craft Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Craft Technology and Asset World 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 Asset World Corp are associated (or correlated) with Silicon Craft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Craft Technology has no effect on the direction of Asset World i.e., Asset World and Silicon Craft go up and down completely randomly.
Pair Corralation between Asset World and Silicon Craft
Assuming the 90 days trading horizon Asset World Corp is expected to generate 1.98 times more return on investment than Silicon Craft. However, Asset World is 1.98 times more volatile than Silicon Craft Technology. It trades about 0.01 of its potential returns per unit of risk. Silicon Craft Technology is currently generating about -0.09 per unit of risk. If you would invest 207.00 in Asset World Corp on April 21, 2025 and sell it today you would lose (3.00) from holding Asset World Corp or give up 1.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Asset World Corp vs. Silicon Craft Technology
Performance |
Timeline |
Asset World Corp |
Silicon Craft Technology |
Asset World and Silicon Craft Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asset World and Silicon Craft
The main advantage of trading using opposite Asset World and Silicon Craft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asset World position performs unexpectedly, Silicon Craft 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 Silicon Craft will offset losses from the drop in Silicon Craft's long position.Asset World vs. Central Retail | Asset World vs. Gulf Energy Development | Asset World vs. BTS Group Holdings | Asset World vs. Bangkok Expressway and |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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