Correlation Between AAPICO Hitech and TPI Polene
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and TPI Polene 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 TPI Polene 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 TPI Polene Public, you can compare the effects of market volatilities on AAPICO Hitech and TPI Polene 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 TPI Polene. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and TPI Polene.
Diversification Opportunities for AAPICO Hitech and TPI Polene
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AAPICO and TPI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and TPI Polene Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Polene 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 TPI Polene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Polene Public has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and TPI Polene go up and down completely randomly.
Pair Corralation between AAPICO Hitech and TPI Polene
Assuming the 90 days horizon AAPICO Hitech Public is expected to generate 1.58 times more return on investment than TPI Polene. However, AAPICO Hitech is 1.58 times more volatile than TPI Polene Public. It trades about -0.04 of its potential returns per unit of risk. TPI Polene Public is currently generating about -0.09 per unit of risk. If you would invest 2,161 in AAPICO Hitech Public on August 29, 2024 and sell it today you would lose (331.00) from holding AAPICO Hitech Public or give up 15.32% 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. TPI Polene Public
Performance |
| Timeline |
| AAPICO Hitech Public |
| TPI Polene Public |
AAPICO Hitech and TPI Polene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and TPI Polene
The main advantage of trading using opposite AAPICO Hitech and TPI Polene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, TPI Polene 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 TPI Polene will offset losses from the drop in TPI Polene's long position.| AAPICO Hitech vs. Delta Electronics Public | AAPICO Hitech vs. Namwiwat Medical | AAPICO Hitech vs. Silicon Craft Technology | AAPICO Hitech vs. Winnergy Medical 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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