Correlation Between AAPICO Hitech and NEP Realty
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and NEP Realty 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 NEP Realty 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 NEP Realty and, you can compare the effects of market volatilities on AAPICO Hitech and NEP Realty 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 NEP Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and NEP Realty.
Diversification Opportunities for AAPICO Hitech and NEP Realty
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AAPICO and NEP is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and NEP Realty and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEP Realty 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 NEP Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEP Realty has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and NEP Realty go up and down completely randomly.
Pair Corralation between AAPICO Hitech and NEP Realty
Assuming the 90 days horizon AAPICO Hitech Public is expected to generate 0.86 times more return on investment than NEP Realty. However, AAPICO Hitech Public is 1.17 times less risky than NEP Realty. It trades about -0.18 of its potential returns per unit of risk. NEP Realty and is currently generating about -0.2 per unit of risk. If you would invest 1,990 in AAPICO Hitech Public on September 1, 2024 and sell it today you would lose (190.00) from holding AAPICO Hitech Public or give up 9.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAPICO Hitech Public vs. NEP Realty and
Performance |
| Timeline |
| AAPICO Hitech Public |
| NEP Realty |
AAPICO Hitech and NEP Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and NEP Realty
The main advantage of trading using opposite AAPICO Hitech and NEP Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, NEP Realty 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 NEP Realty will offset losses from the drop in NEP Realty's long position.| AAPICO Hitech vs. TRC Construction Public | AAPICO Hitech vs. Bangkok Expressway and | AAPICO Hitech vs. Lohakit Metal Public | AAPICO Hitech vs. Gunkul Engineering Public |
| NEP Realty vs. Nawarat Patanakarn Public | NEP Realty vs. Newcity Public | NEP Realty vs. Pan Asia Footwear | NEP Realty vs. Ocean Glass 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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