Correlation Between BJC Heavy and Asia Precision
Can any of the company-specific risk be diversified away by investing in both BJC Heavy and Asia 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 BJC Heavy and Asia Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJC Heavy Industries and Asia Precision Public, you can compare the effects of market volatilities on BJC Heavy and Asia 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 BJC Heavy with a short position of Asia Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJC Heavy and Asia Precision.
Diversification Opportunities for BJC Heavy and Asia Precision
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BJC and Asia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding BJC Heavy Industries and Asia Precision Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Precision Public and BJC Heavy 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 BJC Heavy Industries are associated (or correlated) with Asia Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Precision Public has no effect on the direction of BJC Heavy i.e., BJC Heavy and Asia Precision go up and down completely randomly.
Pair Corralation between BJC Heavy and Asia Precision
Assuming the 90 days trading horizon BJC Heavy is expected to generate 1.01 times less return on investment than Asia Precision. In addition to that, BJC Heavy is 1.0 times more volatile than Asia Precision Public. It trades about 0.12 of its total potential returns per unit of risk. Asia Precision Public is currently generating about 0.12 per unit of volatility. If you would invest 0.00 in Asia Precision Public on September 3, 2024 and sell it today you would earn a total of 187.00 from holding Asia Precision Public or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJC Heavy Industries vs. Asia Precision Public
Performance |
| Timeline |
| BJC Heavy Industries |
| Asia Precision Public |
BJC Heavy and Asia Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJC Heavy and Asia Precision
The main advantage of trading using opposite BJC Heavy and Asia Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJC Heavy position performs unexpectedly, Asia 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 Asia Precision will offset losses from the drop in Asia Precision's long position.| BJC Heavy vs. Asia Aviation Public | BJC Heavy vs. Bangkok Dusit Medical | BJC Heavy vs. Bangkok Expressway and | BJC Heavy vs. Airports of Thailand |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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