Correlation Between AAPICO Hitech and Eastern Commercial
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and Eastern Commercial 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 Eastern Commercial 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 Eastern Commercial Leasing, you can compare the effects of market volatilities on AAPICO Hitech and Eastern Commercial 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 Eastern Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and Eastern Commercial.
Diversification Opportunities for AAPICO Hitech and Eastern Commercial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AAPICO and Eastern is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and Eastern Commercial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Commercial 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 Eastern Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Commercial has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and Eastern Commercial go up and down completely randomly.
Pair Corralation between AAPICO Hitech and Eastern Commercial
Assuming the 90 days horizon AAPICO Hitech Public is expected to under-perform the Eastern Commercial. But the stock apears to be less risky and, when comparing its historical volatility, AAPICO Hitech Public is 29.98 times less risky than Eastern Commercial. The stock trades about -0.08 of its potential returns per unit of risk. The Eastern Commercial Leasing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 140.00 in Eastern Commercial Leasing on October 22, 2024 and sell it today you would lose (60.00) from holding Eastern Commercial Leasing or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.54% |
| Values | Daily Returns |
AAPICO Hitech Public vs. Eastern Commercial Leasing
Performance |
| Timeline |
| AAPICO Hitech Public |
| Eastern Commercial |
AAPICO Hitech and Eastern Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and Eastern Commercial
The main advantage of trading using opposite AAPICO Hitech and Eastern Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, Eastern Commercial 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 Eastern Commercial will offset losses from the drop in Eastern Commercial's long position.| AAPICO Hitech vs. CPN Retail Growth | AAPICO Hitech vs. Hydrogen Freehold Leasehold | AAPICO Hitech vs. Golden Ventures Leasehold | AAPICO Hitech vs. Central Retail |
| Eastern Commercial vs. Chai Watana Tannery | Eastern Commercial vs. EMC Public | Eastern Commercial vs. Asia Plus Group | Eastern Commercial vs. Globlex Holding Management |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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