Correlation Between AJ Plast and Capital Engineering
Can any of the company-specific risk be diversified away by investing in both AJ Plast and Capital Engineering 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 Capital Engineering 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 Capital Engineering Network, you can compare the effects of market volatilities on AJ Plast and Capital Engineering 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 Capital Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Capital Engineering.
Diversification Opportunities for AJ Plast and Capital Engineering
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AJ Plast and Capital is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and Capital Engineering Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Engineering 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 Capital Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Engineering has no effect on the direction of AJ Plast i.e., AJ Plast and Capital Engineering go up and down completely randomly.
Pair Corralation between AJ Plast and Capital Engineering
Assuming the 90 days horizon AJ Plast is expected to generate 1.02 times less return on investment than Capital Engineering. In addition to that, AJ Plast is 1.0 times more volatile than Capital Engineering Network. It trades about 0.08 of its total potential returns per unit of risk. Capital Engineering Network is currently generating about 0.08 per unit of volatility. If you would invest 206.00 in Capital Engineering Network on September 1, 2024 and sell it today you would lose (6.00) from holding Capital Engineering Network or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
AJ Plast Public vs. Capital Engineering Network
Performance |
| Timeline |
| AJ Plast Public |
| Capital Engineering |
AJ Plast and Capital Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and Capital Engineering
The main advantage of trading using opposite AJ Plast and Capital Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast position performs unexpectedly, Capital Engineering 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 Capital Engineering will offset losses from the drop in Capital Engineering'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 |
| Capital Engineering vs. Gratitude Infinite Public | Capital Engineering vs. Christiani Nielsen Public | Capital Engineering vs. Country Group Holdings | Capital Engineering vs. BJC Heavy Industries |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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