Correlation Between AP Public and Chonburi Concrete
Can any of the company-specific risk be diversified away by investing in both AP Public and Chonburi Concrete 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 Chonburi Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and Chonburi Concrete Product, you can compare the effects of market volatilities on AP Public and Chonburi Concrete 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 Chonburi Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and Chonburi Concrete.
Diversification Opportunities for AP Public and Chonburi Concrete
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AP Public and Chonburi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and Chonburi Concrete Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chonburi Concrete Product 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 Chonburi Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chonburi Concrete Product has no effect on the direction of AP Public i.e., AP Public and Chonburi Concrete go up and down completely randomly.
Pair Corralation between AP Public and Chonburi Concrete
Assuming the 90 days horizon AP Public is expected to generate 3673.4 times less return on investment than Chonburi Concrete. But when comparing it to its historical volatility, AP Public is 28.41 times less risky than Chonburi Concrete. It trades about 0.0 of its potential returns per unit of risk. Chonburi Concrete Product is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Chonburi Concrete Product on August 25, 2024 and sell it today you would lose (11.00) from holding Chonburi Concrete Product or give up 26.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Public vs. Chonburi Concrete Product
Performance |
| Timeline |
| AP Public |
| Chonburi Concrete Product |
AP Public and Chonburi Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and Chonburi Concrete
The main advantage of trading using opposite AP Public and Chonburi Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, Chonburi Concrete 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 Chonburi Concrete will offset losses from the drop in Chonburi Concrete'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 |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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