Correlation Between AAPICO Hitech and IT City
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and IT City 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 IT City 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 IT City Public, you can compare the effects of market volatilities on AAPICO Hitech and IT City 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 IT City. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and IT City.
Diversification Opportunities for AAPICO Hitech and IT City
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AAPICO and IT City is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and IT City Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IT City Public 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 IT City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IT City Public has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and IT City go up and down completely randomly.
Pair Corralation between AAPICO Hitech and IT City
Assuming the 90 days horizon AAPICO Hitech Public is expected to under-perform the IT City. But the stock apears to be less risky and, when comparing its historical volatility, AAPICO Hitech Public is 1.5 times less risky than IT City. The stock trades about -0.4 of its potential returns per unit of risk. The IT City Public is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 440.00 in IT City Public on October 25, 2024 and sell it today you would lose (44.00) from holding IT City Public or give up 10.0% 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. IT City Public
Performance |
| Timeline |
| AAPICO Hitech Public |
| IT City Public |
AAPICO Hitech and IT City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and IT City
The main advantage of trading using opposite AAPICO Hitech and IT City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, IT City 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 IT City will offset losses from the drop in IT City's long position.| AAPICO Hitech vs. Porn Prom Metal | AAPICO Hitech vs. Lohakit Metal Public | AAPICO Hitech vs. Bhiraj Office Leasehold | AAPICO Hitech vs. Fine Metal Technologies |
| IT City vs. Internet Thailand Public | IT City vs. Jasmine International Public | IT City vs. Hana Microelectronics Public | IT City vs. Italian Thai Development 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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