Correlation Between Asia Polymer and Ocean Plastics
Can any of the company-specific risk be diversified away by investing in both Asia Polymer and Ocean Plastics 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 Polymer and Ocean Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Polymer Corp and Ocean Plastics Co, you can compare the effects of market volatilities on Asia Polymer and Ocean Plastics 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 Polymer with a short position of Ocean Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Polymer and Ocean Plastics.
Diversification Opportunities for Asia Polymer and Ocean Plastics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Ocean is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Asia Polymer Corp and Ocean Plastics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Plastics and Asia Polymer 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 Polymer Corp are associated (or correlated) with Ocean Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Plastics has no effect on the direction of Asia Polymer i.e., Asia Polymer and Ocean Plastics go up and down completely randomly.
Pair Corralation between Asia Polymer and Ocean Plastics
Assuming the 90 days trading horizon Asia Polymer Corp is expected to under-perform the Ocean Plastics. In addition to that, Asia Polymer is 1.19 times more volatile than Ocean Plastics Co. It trades about -0.06 of its total potential returns per unit of risk. Ocean Plastics Co is currently generating about 0.0 per unit of volatility. If you would invest 3,395 in Ocean Plastics Co on September 3, 2024 and sell it today you would lose (100.00) from holding Ocean Plastics Co or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asia Polymer Corp vs. Ocean Plastics Co
Performance |
| Timeline |
| Asia Polymer Corp |
| Ocean Plastics |
Asia Polymer and Ocean Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Polymer and Ocean Plastics
The main advantage of trading using opposite Asia Polymer and Ocean Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Polymer position performs unexpectedly, Ocean Plastics 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 Ocean Plastics will offset losses from the drop in Ocean Plastics' long position.| Asia Polymer vs. USI Corp | Asia Polymer vs. Taiwan Styrene Monomer | Asia Polymer vs. UPC Technology Corp | Asia Polymer vs. Grand Pacific Petrochemical |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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