Correlation Between ALL ENERGY and AAPICO Hitech
Can any of the company-specific risk be diversified away by investing in both ALL ENERGY and AAPICO Hitech 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 ALL ENERGY and AAPICO Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALL ENERGY UTILITIES and AAPICO Hitech Public, you can compare the effects of market volatilities on ALL ENERGY and AAPICO Hitech 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 ALL ENERGY with a short position of AAPICO Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALL ENERGY and AAPICO Hitech.
Diversification Opportunities for ALL ENERGY and AAPICO Hitech
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALL and AAPICO is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ALL ENERGY UTILITIES and AAPICO Hitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAPICO Hitech Public and ALL ENERGY 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 ALL ENERGY UTILITIES are associated (or correlated) with AAPICO Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAPICO Hitech Public has no effect on the direction of ALL ENERGY i.e., ALL ENERGY and AAPICO Hitech go up and down completely randomly.
Pair Corralation between ALL ENERGY and AAPICO Hitech
Assuming the 90 days horizon ALL ENERGY UTILITIES is expected to under-perform the AAPICO Hitech. In addition to that, ALL ENERGY is 1.51 times more volatile than AAPICO Hitech Public. It trades about -0.07 of its total potential returns per unit of risk. AAPICO Hitech Public is currently generating about -0.03 per unit of volatility. If you would invest 2,746 in AAPICO Hitech Public on August 31, 2024 and sell it today you would lose (926.00) from holding AAPICO Hitech Public or give up 33.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
ALL ENERGY UTILITIES vs. AAPICO Hitech Public
Performance |
| Timeline |
| ALL ENERGY UTILITIES |
| AAPICO Hitech Public |
ALL ENERGY and AAPICO Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALL ENERGY and AAPICO Hitech
The main advantage of trading using opposite ALL ENERGY and AAPICO Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALL ENERGY position performs unexpectedly, AAPICO Hitech 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 AAPICO Hitech will offset losses from the drop in AAPICO Hitech's long position.| ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY vs. Lohakit Metal Public |
| AAPICO Hitech vs. TRC Construction Public | AAPICO Hitech vs. Bangkok Expressway and | AAPICO Hitech vs. Lohakit Metal Public | AAPICO Hitech vs. Gunkul Engineering Public |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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