Correlation Between AJ Plast and Boutique Newcity
Can any of the company-specific risk be diversified away by investing in both AJ Plast and Boutique Newcity 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 Boutique Newcity 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 Boutique Newcity Public, you can compare the effects of market volatilities on AJ Plast and Boutique Newcity 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 Boutique Newcity. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Boutique Newcity.
Diversification Opportunities for AJ Plast and Boutique Newcity
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AJ Plast and Boutique is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and Boutique Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boutique Newcity 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 Boutique Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boutique Newcity Public has no effect on the direction of AJ Plast i.e., AJ Plast and Boutique Newcity go up and down completely randomly.
Pair Corralation between AJ Plast and Boutique Newcity
Assuming the 90 days horizon AJ Plast Public is expected to under-perform the Boutique Newcity. In addition to that, AJ Plast is 1.06 times more volatile than Boutique Newcity Public. It trades about -0.35 of its total potential returns per unit of risk. Boutique Newcity Public is currently generating about -0.08 per unit of volatility. If you would invest 1,560 in Boutique Newcity Public on November 6, 2024 and sell it today you would lose (110.00) from holding Boutique Newcity Public or give up 7.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Plast Public vs. Boutique Newcity Public
Performance |
| Timeline |
| AJ Plast Public |
| Boutique Newcity Public |
AJ Plast and Boutique Newcity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and Boutique Newcity
The main advantage of trading using opposite AJ Plast and Boutique Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast position performs unexpectedly, Boutique Newcity 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 Boutique Newcity will offset losses from the drop in Boutique Newcity'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 |
| Boutique Newcity vs. Asia Fiber Public | Boutique Newcity vs. AJ Plast Public | Boutique Newcity vs. Castle Peak Holdings | Boutique Newcity vs. CPL Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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