Correlation Between Ocean Plastics and Asia Polymer
Can any of the company-specific risk be diversified away by investing in both Ocean Plastics and Asia Polymer 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 Ocean Plastics and Asia Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Plastics Co and Asia Polymer Corp, you can compare the effects of market volatilities on Ocean Plastics and Asia Polymer 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 Ocean Plastics with a short position of Asia Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Plastics and Asia Polymer.
Diversification Opportunities for Ocean Plastics and Asia Polymer
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocean and Asia is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Plastics Co and Asia Polymer Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Polymer Corp and Ocean Plastics 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 Ocean Plastics Co are associated (or correlated) with Asia Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Polymer Corp has no effect on the direction of Ocean Plastics i.e., Ocean Plastics and Asia Polymer go up and down completely randomly.
Pair Corralation between Ocean Plastics and Asia Polymer
Assuming the 90 days trading horizon Ocean Plastics is expected to generate 1.94 times less return on investment than Asia Polymer. But when comparing it to its historical volatility, Ocean Plastics Co is 1.98 times less risky than Asia Polymer. It trades about 0.07 of its potential returns per unit of risk. Asia Polymer Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,435 in Asia Polymer Corp on December 1, 2024 and sell it today you would earn a total of 40.00 from holding Asia Polymer Corp or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Plastics Co vs. Asia Polymer Corp
Performance |
| Timeline |
| Ocean Plastics |
| Asia Polymer Corp |
Ocean Plastics and Asia Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Plastics and Asia Polymer
The main advantage of trading using opposite Ocean Plastics and Asia Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Plastics position performs unexpectedly, Asia Polymer 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 Polymer will offset losses from the drop in Asia Polymer's long position.| Ocean Plastics vs. San Fang Chemical | Ocean Plastics vs. Taita Chemical Co | Ocean Plastics vs. Tah Hsin Industrial | Ocean Plastics vs. Yonyu Plastics Co |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |