Correlation Between Advanced Information and Allianz Ayudhya
Can any of the company-specific risk be diversified away by investing in both Advanced Information and Allianz Ayudhya 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 Advanced Information and Allianz Ayudhya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Information Technology and Allianz Ayudhya Capital, you can compare the effects of market volatilities on Advanced Information and Allianz Ayudhya 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 Advanced Information with a short position of Allianz Ayudhya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Information and Allianz Ayudhya.
Diversification Opportunities for Advanced Information and Allianz Ayudhya
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Advanced and Allianz is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Information Technolog and Allianz Ayudhya Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz Ayudhya Capital and Advanced Information 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 Advanced Information Technology are associated (or correlated) with Allianz Ayudhya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz Ayudhya Capital has no effect on the direction of Advanced Information i.e., Advanced Information and Allianz Ayudhya go up and down completely randomly.
Pair Corralation between Advanced Information and Allianz Ayudhya
Assuming the 90 days trading horizon Advanced Information Technology is expected to generate 1.59 times more return on investment than Allianz Ayudhya. However, Advanced Information is 1.59 times more volatile than Allianz Ayudhya Capital. It trades about 0.08 of its potential returns per unit of risk. Allianz Ayudhya Capital is currently generating about -0.05 per unit of risk. If you would invest 418.00 in Advanced Information Technology on August 30, 2024 and sell it today you would earn a total of 14.00 from holding Advanced Information Technology or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Information Technolog vs. Allianz Ayudhya Capital
Performance |
| Timeline |
| Advanced Information |
| Allianz Ayudhya Capital |
Advanced Information and Allianz Ayudhya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Information and Allianz Ayudhya
The main advantage of trading using opposite Advanced Information and Allianz Ayudhya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Information position performs unexpectedly, Allianz Ayudhya 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 Allianz Ayudhya will offset losses from the drop in Allianz Ayudhya's long position.| Advanced Information vs. AP Public | Advanced Information vs. Jasmine International Public | Advanced Information vs. Asia Plus Group | Advanced Information vs. Bangchak Public |
| Allianz Ayudhya vs. Bank of Ayudhya | Allianz Ayudhya vs. Bangkok Aviation Fuel | Allianz Ayudhya vs. AP Public | Allianz Ayudhya vs. BEC World 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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