Correlation Between AJ Plast and Asia Fiber
Can any of the company-specific risk be diversified away by investing in both AJ Plast and Asia Fiber 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 AJ Plast and Asia Fiber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Plast Public and Asia Fiber Public, you can compare the effects of market volatilities on AJ Plast and Asia Fiber 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 AJ Plast with a short position of Asia Fiber. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Asia Fiber.
Diversification Opportunities for AJ Plast and Asia Fiber
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AJ Plast and Asia is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and Asia Fiber Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Fiber Public and AJ Plast 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 AJ Plast Public are associated (or correlated) with Asia Fiber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Fiber Public has no effect on the direction of AJ Plast i.e., AJ Plast and Asia Fiber go up and down completely randomly.
Pair Corralation between AJ Plast and Asia Fiber
Assuming the 90 days horizon AJ Plast is expected to generate 1.08 times less return on investment than Asia Fiber. But when comparing it to its historical volatility, AJ Plast Public is 1.0 times less risky than Asia Fiber. It trades about 0.03 of its potential returns per unit of risk. Asia Fiber Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Asia Fiber Public on November 6, 2024 and sell it today you would lose (470.00) from holding Asia Fiber Public or give up 54.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Plast Public vs. Asia Fiber Public
Performance |
| Timeline |
| AJ Plast Public |
| Asia Fiber Public |
AJ Plast and Asia Fiber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and Asia Fiber
The main advantage of trading using opposite AJ Plast and Asia Fiber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast position performs unexpectedly, Asia Fiber 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 Asia Fiber will offset losses from the drop in Asia Fiber's long position.| AJ Plast vs. AAPICO Hitech Public | AJ Plast vs. AP Public | AJ Plast vs. Aikchol Hospital Public | AJ Plast vs. Bank of Ayudhya |
| Asia Fiber vs. AJ Plast Public | Asia Fiber vs. Aikchol Hospital Public | Asia Fiber vs. Boutique Newcity Public | Asia Fiber vs. Allianz Ayudhya Capital |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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