Correlation Between Aqua Public and Grand Prix
Can any of the company-specific risk be diversified away by investing in both Aqua Public and Grand Prix 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 Grand Prix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqua Public and Grand Prix International, you can compare the effects of market volatilities on Aqua Public and Grand Prix 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 Grand Prix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Public and Grand Prix.
Diversification Opportunities for Aqua Public and Grand Prix
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqua and Grand is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Public and Grand Prix International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Prix International 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 Grand Prix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Prix International has no effect on the direction of Aqua Public i.e., Aqua Public and Grand Prix go up and down completely randomly.
Pair Corralation between Aqua Public and Grand Prix
Assuming the 90 days trading horizon Aqua Public is expected to generate 1.07 times less return on investment than Grand Prix. In addition to that, Aqua Public is 1.0 times more volatile than Grand Prix International. It trades about 0.04 of its total potential returns per unit of risk. Grand Prix International is currently generating about 0.04 per unit of volatility. If you would invest 145.00 in Grand Prix International on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Grand Prix International or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqua Public vs. Grand Prix International
Performance |
| Timeline |
| Aqua Public |
| Grand Prix International |
Aqua Public and Grand Prix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqua Public and Grand Prix
The main advantage of trading using opposite Aqua Public and Grand Prix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Public position performs unexpectedly, Grand Prix 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 Grand Prix will offset losses from the drop in Grand Prix's long position.| Aqua Public vs. Big Camera | Aqua Public vs. Bangkok Chain Hospital | Aqua Public vs. Grande Asset Hotels | Aqua Public vs. Better World Green |
| Grand Prix vs. Interlink Communication Public | Grand Prix vs. Aqua Public | Grand Prix vs. BEC World Public | Grand Prix vs. Grande Asset Hotels |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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