Correlation Between Energy Absolute and AJ Plast
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and AJ Plast 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 Energy Absolute and AJ Plast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and AJ Plast Public, you can compare the effects of market volatilities on Energy Absolute and AJ Plast 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 Energy Absolute with a short position of AJ Plast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and AJ Plast.
Diversification Opportunities for Energy Absolute and AJ Plast
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Energy and AJ Plast is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and AJ Plast Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Plast Public and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with AJ Plast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Plast Public has no effect on the direction of Energy Absolute i.e., Energy Absolute and AJ Plast go up and down completely randomly.
Pair Corralation between Energy Absolute and AJ Plast
Assuming the 90 days horizon Energy Absolute is expected to generate 79.33 times less return on investment than AJ Plast. But when comparing it to its historical volatility, Energy Absolute Public is 21.01 times less risky than AJ Plast. It trades about 0.03 of its potential returns per unit of risk. AJ Plast Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 535.00 in AJ Plast Public on September 2, 2024 and sell it today you would lose (55.00) from holding AJ Plast Public or give up 10.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Absolute Public vs. AJ Plast Public
Performance |
| Timeline |
| Energy Absolute Public |
| AJ Plast Public |
Energy Absolute and AJ Plast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and AJ Plast
The main advantage of trading using opposite Energy Absolute and AJ Plast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, AJ Plast 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 Plast will offset losses from the drop in AJ Plast's long position.| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
| AJ Plast vs. AAPICO Hitech Public | AJ Plast vs. AP Public | AJ Plast vs. Aikchol Hospital Public | AJ Plast vs. Bank of Ayudhya |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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