Correlation Between Asia Metal and AAPICO Hitech
Can any of the company-specific risk be diversified away by investing in both Asia Metal and AAPICO Hitech 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 Asia Metal and AAPICO Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Metal Public and AAPICO Hitech Public, you can compare the effects of market volatilities on Asia Metal and AAPICO Hitech 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 Asia Metal with a short position of AAPICO Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and AAPICO Hitech.
Diversification Opportunities for Asia Metal and AAPICO Hitech
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asia and AAPICO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Public and AAPICO Hitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAPICO Hitech Public and Asia Metal 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 Asia Metal Public are associated (or correlated) with AAPICO Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAPICO Hitech Public has no effect on the direction of Asia Metal i.e., Asia Metal and AAPICO Hitech go up and down completely randomly.
Pair Corralation between Asia Metal and AAPICO Hitech
Assuming the 90 days trading horizon Asia Metal Public is expected to under-perform the AAPICO Hitech. But the stock apears to be less risky and, when comparing its historical volatility, Asia Metal Public is 1.59 times less risky than AAPICO Hitech. The stock trades about -0.31 of its potential returns per unit of risk. The AAPICO Hitech Public is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,960 in AAPICO Hitech Public on August 31, 2024 and sell it today you would lose (160.00) from holding AAPICO Hitech Public or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Metal Public vs. AAPICO Hitech Public
Performance |
| Timeline |
| Asia Metal Public |
| AAPICO Hitech Public |
Asia Metal and AAPICO Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and AAPICO Hitech
The main advantage of trading using opposite Asia Metal and AAPICO Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal position performs unexpectedly, AAPICO Hitech 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 AAPICO Hitech will offset losses from the drop in AAPICO Hitech's long position.| Asia Metal vs. AAPICO Hitech Public | Asia Metal vs. AP Public | Asia Metal vs. Aikchol Hospital Public | Asia Metal vs. Bank of Ayudhya |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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