Correlation Between AJ Plast and Alucon Public
Can any of the company-specific risk be diversified away by investing in both AJ Plast and Alucon 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 AJ Plast and Alucon Public 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 Alucon Public, you can compare the effects of market volatilities on AJ Plast and Alucon 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 AJ Plast with a short position of Alucon Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Alucon Public.
Diversification Opportunities for AJ Plast and Alucon Public
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between AJ Plast and Alucon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and Alucon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alucon 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 Alucon Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alucon Public has no effect on the direction of AJ Plast i.e., AJ Plast and Alucon Public go up and down completely randomly.
Pair Corralation between AJ Plast and Alucon Public
Assuming the 90 days horizon AJ Plast Public is expected to under-perform the Alucon Public. In addition to that, AJ Plast is 1.49 times more volatile than Alucon Public. It trades about -0.37 of its total potential returns per unit of risk. Alucon Public is currently generating about -0.16 per unit of volatility. If you would invest 17,450 in Alucon Public on September 12, 2024 and sell it today you would lose (600.00) from holding Alucon Public or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AJ Plast Public vs. Alucon Public
Performance |
| Timeline |
| AJ Plast Public |
| Alucon Public |
AJ Plast and Alucon Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and Alucon Public
The main advantage of trading using opposite AJ Plast and Alucon Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast position performs unexpectedly, Alucon 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 Alucon Public will offset losses from the drop in Alucon Public's long position.| AJ Plast vs. Thantawan Industry Public | AJ Plast vs. The Erawan Group | AJ Plast vs. Jay Mart Public | AJ Plast vs. Airports of Thailand |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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