Correlation Between AJ Advance and Eastern Technical
Can any of the company-specific risk be diversified away by investing in both AJ Advance and Eastern Technical 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 Advance and Eastern Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Advance Technology and Eastern Technical Engineering, you can compare the effects of market volatilities on AJ Advance and Eastern Technical 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 Advance with a short position of Eastern Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Advance and Eastern Technical.
Diversification Opportunities for AJ Advance and Eastern Technical
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AJA and Eastern is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding AJ Advance Technology and Eastern Technical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Technical and AJ Advance 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 Advance Technology are associated (or correlated) with Eastern Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Technical has no effect on the direction of AJ Advance i.e., AJ Advance and Eastern Technical go up and down completely randomly.
Pair Corralation between AJ Advance and Eastern Technical
Assuming the 90 days trading horizon AJ Advance Technology is expected to generate 1.0 times more return on investment than Eastern Technical. However, AJ Advance is 1.0 times more volatile than Eastern Technical Engineering. It trades about 0.05 of its potential returns per unit of risk. Eastern Technical Engineering is currently generating about 0.05 per unit of risk. If you would invest 20.00 in AJ Advance Technology on September 1, 2024 and sell it today you would lose (5.00) from holding AJ Advance Technology or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Advance Technology vs. Eastern Technical Engineering
Performance |
| Timeline |
| AJ Advance Technology |
| Eastern Technical |
AJ Advance and Eastern Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Advance and Eastern Technical
The main advantage of trading using opposite AJ Advance and Eastern Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Advance position performs unexpectedly, Eastern Technical 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 Eastern Technical will offset losses from the drop in Eastern Technical's long position.| AJ Advance vs. TRC Construction Public | AJ Advance vs. Bangkok Expressway and | AJ Advance vs. Lohakit Metal Public | AJ Advance vs. Gunkul Engineering Public |
| Eastern Technical vs. G Capital Public | Eastern Technical vs. Harn Engineering Solutions | Eastern Technical vs. Fortune Parts Industry | Eastern Technical vs. Hydrotek 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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