Correlation Between AJ Advance and Global Consumer
Can any of the company-specific risk be diversified away by investing in both AJ Advance and Global Consumer 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 Global Consumer 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 Global Consumer Public, you can compare the effects of market volatilities on AJ Advance and Global Consumer 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 Global Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Advance and Global Consumer.
Diversification Opportunities for AJ Advance and Global Consumer
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AJA and Global is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AJ Advance Technology and Global Consumer Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Consumer Public 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 Global Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Consumer Public has no effect on the direction of AJ Advance i.e., AJ Advance and Global Consumer go up and down completely randomly.
Pair Corralation between AJ Advance and Global Consumer
Assuming the 90 days trading horizon AJ Advance Technology is expected to under-perform the Global Consumer. In addition to that, AJ Advance is 1.43 times more volatile than Global Consumer Public. It trades about -0.03 of its total potential returns per unit of risk. Global Consumer Public is currently generating about -0.04 per unit of volatility. If you would invest 17.00 in Global Consumer Public on November 28, 2024 and sell it today you would lose (1.00) from holding Global Consumer Public or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AJ Advance Technology vs. Global Consumer Public
Performance |
| Timeline |
| AJ Advance Technology |
| Global Consumer Public |
AJ Advance and Global Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Advance and Global Consumer
The main advantage of trading using opposite AJ Advance and Global Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Advance position performs unexpectedly, Global Consumer 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 Global Consumer will offset losses from the drop in Global Consumer's long position.| AJ Advance vs. Eastern Commercial Leasing | AJ Advance vs. Finansa Public | AJ Advance vs. General Environmental Conservation | AJ Advance vs. CPL Group Public |
| Global Consumer vs. AJ Advance Technology | Global Consumer vs. POSCO Thainox Public | Global Consumer vs. Ichitan Group Public | Global Consumer vs. RB Food Supply |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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