Correlation Between Asset Five and AP Public
Can any of the company-specific risk be diversified away by investing in both Asset Five and AP Public 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 Five and AP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asset Five Group and AP Public, you can compare the effects of market volatilities on Asset Five and AP Public 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 Five with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asset Five and AP Public.
Diversification Opportunities for Asset Five and AP Public
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asset and AP Public is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Asset Five Group and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and Asset Five 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 Five Group are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Asset Five i.e., Asset Five and AP Public go up and down completely randomly.
Pair Corralation between Asset Five and AP Public
Assuming the 90 days horizon Asset Five Group is expected to generate 40.98 times more return on investment than AP Public. However, Asset Five is 40.98 times more volatile than AP Public. It trades about 0.06 of its potential returns per unit of risk. AP Public is currently generating about -0.03 per unit of risk. If you would invest 309.00 in Asset Five Group on September 3, 2024 and sell it today you would lose (37.00) from holding Asset Five Group or give up 11.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asset Five Group vs. AP Public
Performance |
| Timeline |
| Asset Five Group |
| AP Public |
Asset Five and AP Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asset Five and AP Public
The main advantage of trading using opposite Asset Five and AP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asset Five position performs unexpectedly, AP Public 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 AP Public will offset losses from the drop in AP Public's long position.| Asset Five vs. AP Public | Asset Five vs. Electricity Generating Public | Asset Five vs. Com7 PCL | Asset Five vs. Bangkok Dusit Medical |
| AP Public vs. Land and Houses | AP Public vs. Quality Houses Public | AP Public vs. Bangkok Bank Public | AP Public vs. Siri Prime Office |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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