Correlation Between AJ Plast and TPI Polene
Can any of the company-specific risk be diversified away by investing in both AJ Plast and TPI Polene 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 TPI Polene 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 TPI Polene Public, you can compare the effects of market volatilities on AJ Plast and TPI Polene 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 TPI Polene. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and TPI Polene.
Diversification Opportunities for AJ Plast and TPI Polene
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AJ Plast and TPI is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and TPI Polene Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Polene 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 TPI Polene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Polene Public has no effect on the direction of AJ Plast i.e., AJ Plast and TPI Polene go up and down completely randomly.
Pair Corralation between AJ Plast and TPI Polene
Assuming the 90 days horizon AJ Plast Public is expected to generate 55.24 times more return on investment than TPI Polene. However, AJ Plast is 55.24 times more volatile than TPI Polene Public. It trades about 0.06 of its potential returns per unit of risk. TPI Polene Public is currently generating about -0.07 per unit of risk. If you would invest 599.00 in AJ Plast Public on September 1, 2024 and sell it today you would lose (119.00) from holding AJ Plast Public or give up 19.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Plast Public vs. TPI Polene Public
Performance |
| Timeline |
| AJ Plast Public |
| TPI Polene Public |
AJ Plast and TPI Polene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and TPI Polene
The main advantage of trading using opposite AJ Plast and TPI Polene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast position performs unexpectedly, TPI Polene 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 TPI Polene will offset losses from the drop in TPI Polene'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 |
| TPI Polene vs. AAPICO Hitech Public | TPI Polene vs. AP Public | TPI Polene vs. Aikchol Hospital Public | TPI Polene vs. Bank of Ayudhya |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stocks Directory Find actively traded stocks across global markets |