Correlation Between Aiptek International and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both Aiptek International and Grand Plastic 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 Aiptek International and Grand Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aiptek International and Grand Plastic Technology, you can compare the effects of market volatilities on Aiptek International and Grand Plastic 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 Aiptek International with a short position of Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aiptek International and Grand Plastic.
Diversification Opportunities for Aiptek International and Grand Plastic
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aiptek and Grand is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aiptek International and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology and Aiptek International 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 Aiptek International are associated (or correlated) with Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of Aiptek International i.e., Aiptek International and Grand Plastic go up and down completely randomly.
Pair Corralation between Aiptek International and Grand Plastic
Assuming the 90 days trading horizon Aiptek International is expected to generate 1.31 times less return on investment than Grand Plastic. But when comparing it to its historical volatility, Aiptek International is 1.2 times less risky than Grand Plastic. It trades about 0.1 of its potential returns per unit of risk. Grand Plastic Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 156,000 in Grand Plastic Technology on August 30, 2024 and sell it today you would earn a total of 8,500 from holding Grand Plastic Technology or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aiptek International vs. Grand Plastic Technology
Performance |
| Timeline |
| Aiptek International |
| Grand Plastic Technology |
Aiptek International and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aiptek International and Grand Plastic
The main advantage of trading using opposite Aiptek International and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aiptek International position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic's long position.| Aiptek International vs. Kinko Optical Co | Aiptek International vs. Altek Corp | Aiptek International vs. Harvatek Corp | Aiptek International vs. Asia Optical Co |
| Grand Plastic vs. Sino American Silicon Products | Grand Plastic vs. Powertech Technology | Grand Plastic vs. Formosa Sumco Technology | Grand Plastic vs. Radiant Opto Electronics Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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