Correlation Between Asia Precision and AJ Advance
Can any of the company-specific risk be diversified away by investing in both Asia Precision and AJ Advance 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 Precision and AJ Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Precision Public and AJ Advance Technology, you can compare the effects of market volatilities on Asia Precision and AJ Advance 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 Precision with a short position of AJ Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Precision and AJ Advance.
Diversification Opportunities for Asia Precision and AJ Advance
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and AJA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Asia Precision Public and AJ Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Advance Technology and Asia Precision 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 Precision Public are associated (or correlated) with AJ Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Advance Technology has no effect on the direction of Asia Precision i.e., Asia Precision and AJ Advance go up and down completely randomly.
Pair Corralation between Asia Precision and AJ Advance
Assuming the 90 days trading horizon Asia Precision Public is expected to generate 0.73 times more return on investment than AJ Advance. However, Asia Precision Public is 1.36 times less risky than AJ Advance. It trades about 0.09 of its potential returns per unit of risk. AJ Advance Technology is currently generating about -0.11 per unit of risk. If you would invest 197.00 in Asia Precision Public on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Asia Precision Public or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Precision Public vs. AJ Advance Technology
Performance |
| Timeline |
| Asia Precision Public |
| AJ Advance Technology |
Asia Precision and AJ Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Precision and AJ Advance
The main advantage of trading using opposite Asia Precision and AJ Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Precision position performs unexpectedly, AJ Advance 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 AJ Advance will offset losses from the drop in AJ Advance's long position.| Asia Precision vs. Tata Steel Public | Asia Precision vs. Thaifoods Group Public | Asia Precision vs. TMT Steel Public | Asia Precision vs. The Erawan Group |
| AJ Advance vs. SCB X Public | AJ Advance vs. Kasikornbank Public | AJ Advance vs. PTT Public | AJ Advance vs. Kasikornbank 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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