Correlation Between AP Public and Asset Five
Can any of the company-specific risk be diversified away by investing in both AP Public and Asset Five 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 AP Public and Asset Five into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and Asset Five Group, you can compare the effects of market volatilities on AP Public and Asset Five 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 AP Public with a short position of Asset Five. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and Asset Five.
Diversification Opportunities for AP Public and Asset Five
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AP Public and Asset is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and Asset Five Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asset Five Group and AP Public 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 AP Public are associated (or correlated) with Asset Five. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asset Five Group has no effect on the direction of AP Public i.e., AP Public and Asset Five go up and down completely randomly.
Pair Corralation between AP Public and Asset Five
Assuming the 90 days horizon AP Public is expected to under-perform the Asset Five. But the stock apears to be less risky and, when comparing its historical volatility, AP Public is 1.86 times less risky than Asset Five. The stock trades about -0.21 of its potential returns per unit of risk. The Asset Five Group is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Asset Five Group on September 3, 2024 and sell it today you would lose (18.00) from holding Asset Five Group or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Public vs. Asset Five Group
Performance |
| Timeline |
| AP Public |
| Asset Five Group |
AP Public and Asset Five Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and Asset Five
The main advantage of trading using opposite AP Public and Asset Five positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, Asset Five 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 Asset Five will offset losses from the drop in Asset Five's long position.| AP Public vs. Land and Houses | AP Public vs. Quality Houses Public | AP Public vs. Bangkok Bank Public | AP Public vs. Siri Prime Office |
| Asset Five vs. AP Public | Asset Five vs. Electricity Generating Public | Asset Five vs. Com7 PCL | Asset Five vs. Bangkok Dusit Medical |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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