Correlation Between AP Public and Asia Plus
Can any of the company-specific risk be diversified away by investing in both AP Public and Asia Plus 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 Asia Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and Asia Plus Group, you can compare the effects of market volatilities on AP Public and Asia Plus 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 Asia Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and Asia Plus.
Diversification Opportunities for AP Public and Asia Plus
Poor diversification
The 3 months correlation between AP Public and Asia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and Asia Plus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Plus 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 Asia Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Plus Group has no effect on the direction of AP Public i.e., AP Public and Asia Plus go up and down completely randomly.
Pair Corralation between AP Public and Asia Plus
Assuming the 90 days horizon AP Public is expected to under-perform the Asia Plus. In addition to that, AP Public is 1.81 times more volatile than Asia Plus Group. It trades about -0.19 of its total potential returns per unit of risk. Asia Plus Group is currently generating about -0.08 per unit of volatility. If you would invest 250.00 in Asia Plus Group on August 29, 2024 and sell it today you would lose (4.00) from holding Asia Plus Group or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Public vs. Asia Plus Group
Performance |
| Timeline |
| AP Public |
| Asia Plus Group |
AP Public and Asia Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and Asia Plus
The main advantage of trading using opposite AP Public and Asia Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, Asia Plus 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 Asia Plus will offset losses from the drop in Asia Plus' 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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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