Correlation Between Asia Plus and Team Precision
Can any of the company-specific risk be diversified away by investing in both Asia Plus and Team Precision 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 Plus and Team Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Plus Group and Team Precision Public, you can compare the effects of market volatilities on Asia Plus and Team Precision 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 Plus with a short position of Team Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Plus and Team Precision.
Diversification Opportunities for Asia Plus and Team Precision
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Team is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Team Precision Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Precision Public and Asia Plus 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 Plus Group are associated (or correlated) with Team Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Precision Public has no effect on the direction of Asia Plus i.e., Asia Plus and Team Precision go up and down completely randomly.
Pair Corralation between Asia Plus and Team Precision
Assuming the 90 days trading horizon Asia Plus Group is expected to under-perform the Team Precision. But the stock apears to be less risky and, when comparing its historical volatility, Asia Plus Group is 53.68 times less risky than Team Precision. The stock trades about -0.02 of its potential returns per unit of risk. The Team Precision Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 477.00 in Team Precision Public on September 4, 2024 and sell it today you would lose (215.00) from holding Team Precision Public or give up 45.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Plus Group vs. Team Precision Public
Performance |
| Timeline |
| Asia Plus Group |
| Team Precision Public |
Asia Plus and Team Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Plus and Team Precision
The main advantage of trading using opposite Asia Plus and Team Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Plus position performs unexpectedly, Team Precision 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 Team Precision will offset losses from the drop in Team Precision's long position.| Asia Plus vs. KGI Securities Public | Asia Plus vs. Bangkok Bank Public | Asia Plus vs. Italian Thai Development Public |
| Team Precision vs. SVI Public | Team Precision vs. SVOA Public | Team Precision vs. Hana Microelectronics Public | Team Precision vs. TKS Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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