Correlation Between Asian Insulators and AP Public
Can any of the company-specific risk be diversified away by investing in both Asian Insulators and AP Public 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 Asian Insulators and AP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asian Insulators PCL and AP Public, you can compare the effects of market volatilities on Asian Insulators and AP Public 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 Asian Insulators with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Insulators and AP Public.
Diversification Opportunities for Asian Insulators and AP Public
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asian and AP Public is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Asian Insulators PCL and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and Asian Insulators 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 Asian Insulators PCL are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Asian Insulators i.e., Asian Insulators and AP Public go up and down completely randomly.
Pair Corralation between Asian Insulators and AP Public
Assuming the 90 days horizon Asian Insulators PCL is expected to generate 0.71 times more return on investment than AP Public. However, Asian Insulators PCL is 1.42 times less risky than AP Public. It trades about -0.31 of its potential returns per unit of risk. AP Public is currently generating about -0.27 per unit of risk. If you would invest 392.00 in Asian Insulators PCL on September 1, 2024 and sell it today you would lose (30.00) from holding Asian Insulators PCL or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asian Insulators PCL vs. AP Public
Performance |
| Timeline |
| Asian Insulators PCL |
| AP Public |
Asian Insulators and AP Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asian Insulators and AP Public
The main advantage of trading using opposite Asian Insulators and AP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asian Insulators position performs unexpectedly, AP Public 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 AP Public will offset losses from the drop in AP Public's long position.| Asian Insulators vs. AP Public | Asian Insulators vs. Bangchak Public | Asian Insulators vs. Asia Plus Group | Asian Insulators vs. IRPC 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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