Correlation Between AAPICO Hitech and CSP Steel
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and CSP Steel 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 AAPICO Hitech and CSP Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAPICO Hitech Public and CSP Steel Center, you can compare the effects of market volatilities on AAPICO Hitech and CSP Steel 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 AAPICO Hitech with a short position of CSP Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and CSP Steel.
Diversification Opportunities for AAPICO Hitech and CSP Steel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AAPICO and CSP is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and CSP Steel Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP Steel Center and AAPICO Hitech 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 AAPICO Hitech Public are associated (or correlated) with CSP Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Steel Center has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and CSP Steel go up and down completely randomly.
Pair Corralation between AAPICO Hitech and CSP Steel
Assuming the 90 days horizon AAPICO Hitech Public is expected to generate 0.78 times more return on investment than CSP Steel. However, AAPICO Hitech Public is 1.28 times less risky than CSP Steel. It trades about -0.1 of its potential returns per unit of risk. CSP Steel Center is currently generating about -0.37 per unit of risk. If you would invest 1,910 in AAPICO Hitech Public on September 3, 2024 and sell it today you would lose (110.00) from holding AAPICO Hitech Public or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAPICO Hitech Public vs. CSP Steel Center
Performance |
| Timeline |
| AAPICO Hitech Public |
| CSP Steel Center |
AAPICO Hitech and CSP Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and CSP Steel
The main advantage of trading using opposite AAPICO Hitech and CSP Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, CSP Steel 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 CSP Steel will offset losses from the drop in CSP Steel's long position.| AAPICO Hitech vs. Central Pattana Public | AAPICO Hitech vs. CP ALL Public | AAPICO Hitech vs. Bangkok Dusit Medical | AAPICO Hitech vs. Airports of Thailand |
| CSP Steel vs. PTT Public | CSP Steel vs. PTT Exploration and | CSP Steel vs. The Siam Cement | CSP Steel vs. CP ALL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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