Correlation Between AP Public and RS Public
Can any of the company-specific risk be diversified away by investing in both AP Public and RS 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 AP Public and RS Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and RS Public, you can compare the effects of market volatilities on AP Public and RS 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 AP Public with a short position of RS Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and RS Public.
Diversification Opportunities for AP Public and RS Public
Good diversification
The 3 months correlation between AP Public and RS-R is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and RS Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS Public 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 RS Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Public has no effect on the direction of AP Public i.e., AP Public and RS Public go up and down completely randomly.
Pair Corralation between AP Public and RS Public
Assuming the 90 days horizon AP Public is expected to under-perform the RS Public. But the stock apears to be less risky and, when comparing its historical volatility, AP Public is 47.27 times less risky than RS Public. The stock trades about -0.03 of its potential returns per unit of risk. The RS Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,437 in RS Public on August 31, 2024 and sell it today you would lose (867.00) from holding RS Public or give up 60.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
AP Public vs. RS Public
Performance |
| Timeline |
| AP Public |
| RS Public |
AP Public and RS Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and RS Public
The main advantage of trading using opposite AP Public and RS Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, RS 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 RS Public will offset losses from the drop in RS Public's long position.| AP Public vs. Land and Houses | AP Public vs. Bangkok Bank Public | AP Public vs. Siri Prime Office | AP Public vs. Charoen Pokphand Foods |
| RS Public vs. Major Cineplex Group | RS Public vs. Yggdrazil Group Public | RS Public vs. The Erawan Group | RS Public vs. Autocorp Holding Public |
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.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |