Correlation Between AAPICO Hitech and MCS Steel
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and MCS 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 MCS 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 MCS Steel Public, you can compare the effects of market volatilities on AAPICO Hitech and MCS 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 MCS Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and MCS Steel.
Diversification Opportunities for AAPICO Hitech and MCS Steel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AAPICO and MCS is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and MCS Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCS Steel 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 MCS Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCS Steel Public has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and MCS Steel go up and down completely randomly.
Pair Corralation between AAPICO Hitech and MCS Steel
Assuming the 90 days horizon AAPICO Hitech Public is expected to under-perform the MCS Steel. But the stock apears to be less risky and, when comparing its historical volatility, AAPICO Hitech Public is 19.59 times less risky than MCS Steel. The stock trades about -0.05 of its potential returns per unit of risk. The MCS Steel Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 836.00 in MCS Steel Public on November 27, 2024 and sell it today you would lose (111.00) from holding MCS Steel Public or give up 13.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
AAPICO Hitech Public vs. MCS Steel Public
Performance |
| Timeline |
| AAPICO Hitech Public |
| MCS Steel Public |
AAPICO Hitech and MCS Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and MCS Steel
The main advantage of trading using opposite AAPICO Hitech and MCS Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, MCS 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 MCS Steel will offset losses from the drop in MCS Steel's long position.| AAPICO Hitech vs. S Hotels and | AAPICO Hitech vs. Asia Hotel Public | AAPICO Hitech vs. MFC Asset Management | AAPICO Hitech vs. Laguna Resorts Hotels |
| MCS Steel vs. Lalin Property Public | MCS Steel vs. Land and Houses | MCS Steel vs. Banpu Public | MCS Steel vs. TISCO Financial Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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