Correlation Between Aqua Public and BEC World
Can any of the company-specific risk be diversified away by investing in both Aqua Public and BEC World 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 Aqua Public and BEC World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqua Public and BEC World Public, you can compare the effects of market volatilities on Aqua Public and BEC World 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 Aqua Public with a short position of BEC World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Public and BEC World.
Diversification Opportunities for Aqua Public and BEC World
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqua and BEC is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Public and BEC World Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEC World Public and Aqua 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 Aqua Public are associated (or correlated) with BEC World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEC World Public has no effect on the direction of Aqua Public i.e., Aqua Public and BEC World go up and down completely randomly.
Pair Corralation between Aqua Public and BEC World
Assuming the 90 days trading horizon Aqua Public is expected to generate 1.0 times more return on investment than BEC World. However, Aqua Public is 1.0 times more volatile than BEC World Public. It trades about 0.08 of its potential returns per unit of risk. BEC World Public is currently generating about 0.08 per unit of risk. If you would invest 35.00 in Aqua Public on September 1, 2024 and sell it today you would lose (1.00) from holding Aqua Public or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqua Public vs. BEC World Public
Performance |
| Timeline |
| Aqua Public |
| BEC World Public |
Aqua Public and BEC World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqua Public and BEC World
The main advantage of trading using opposite Aqua Public and BEC World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Public position performs unexpectedly, BEC World 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 BEC World will offset losses from the drop in BEC World's long position.| Aqua Public vs. Bangkok Chain Hospital | Aqua Public vs. Grande Asset Hotels | Aqua Public vs. Better World Green | Aqua Public vs. Chularat Hospital Public |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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