Correlation Between AJ Advance and Qualitech Public
Can any of the company-specific risk be diversified away by investing in both AJ Advance and Qualitech Public 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 Qualitech Public 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 Qualitech Public, you can compare the effects of market volatilities on AJ Advance and Qualitech Public 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 Qualitech Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Advance and Qualitech Public.
Diversification Opportunities for AJ Advance and Qualitech Public
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AJA and Qualitech is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AJ Advance Technology and Qualitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualitech 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 Qualitech Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualitech Public has no effect on the direction of AJ Advance i.e., AJ Advance and Qualitech Public go up and down completely randomly.
Pair Corralation between AJ Advance and Qualitech Public
Assuming the 90 days trading horizon AJ Advance Technology is expected to generate 4.01 times more return on investment than Qualitech Public. However, AJ Advance is 4.01 times more volatile than Qualitech Public. It trades about 0.15 of its potential returns per unit of risk. Qualitech Public is currently generating about -0.03 per unit of risk. If you would invest 14.00 in AJ Advance Technology on September 19, 2024 and sell it today you would earn a total of 2.00 from holding AJ Advance Technology or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Advance Technology vs. Qualitech Public
Performance |
| Timeline |
| AJ Advance Technology |
| Qualitech Public |
AJ Advance and Qualitech Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Advance and Qualitech Public
The main advantage of trading using opposite AJ Advance and Qualitech Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Advance position performs unexpectedly, Qualitech Public 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 Qualitech Public will offset losses from the drop in Qualitech Public's long position.| AJ Advance vs. Hwa Fong Rubber | AJ Advance vs. AAPICO Hitech Public | AJ Advance vs. Haad Thip Public | AJ Advance vs. Italian Thai Development Public |
| Qualitech Public vs. The Erawan Group | Qualitech Public vs. Jay Mart Public | Qualitech Public vs. Airports of Thailand | Qualitech Public vs. Eastern Technical Engineering |
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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