Correlation Between AAPICO Hitech and Italian Thai
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and Italian Thai 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 Italian Thai 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 Italian Thai Development Public, you can compare the effects of market volatilities on AAPICO Hitech and Italian Thai 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 Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and Italian Thai.
Diversification Opportunities for AAPICO Hitech and Italian Thai
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AAPICO and Italian is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop 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 Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and Italian Thai go up and down completely randomly.
Pair Corralation between AAPICO Hitech and Italian Thai
Assuming the 90 days horizon AAPICO Hitech Public is expected to under-perform the Italian Thai. But the stock apears to be less risky and, when comparing its historical volatility, AAPICO Hitech Public is 35.18 times less risky than Italian Thai. The stock trades about -0.02 of its potential returns per unit of risk. The Italian Thai Development Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Italian Thai Development Public on October 25, 2024 and sell it today you would lose (14.00) from holding Italian Thai Development Public or give up 22.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAPICO Hitech Public vs. Italian Thai Development Publi
Performance |
| Timeline |
| AAPICO Hitech Public |
| Italian Thai Develop |
AAPICO Hitech and Italian Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and Italian Thai
The main advantage of trading using opposite AAPICO Hitech and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, Italian Thai 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 Italian Thai will offset losses from the drop in Italian Thai'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 |
| Italian Thai vs. Land and Houses | Italian Thai vs. CH Karnchang Public | Italian Thai vs. Krung Thai Bank | Italian Thai vs. Bangkok Bank 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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