Correlation Between Flux Power and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Flux Power and Asia Pacific 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 Flux Power and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flux Power Holdings and Asia Pacific Wire, you can compare the effects of market volatilities on Flux Power and Asia Pacific 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 Flux Power with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flux Power and Asia Pacific.
Diversification Opportunities for Flux Power and Asia Pacific
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Flux and Asia is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Flux Power Holdings and Asia Pacific Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Wire and Flux Power 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 Flux Power Holdings are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Wire has no effect on the direction of Flux Power i.e., Flux Power and Asia Pacific go up and down completely randomly.
Pair Corralation between Flux Power and Asia Pacific
Given the investment horizon of 90 days Flux Power Holdings is expected to under-perform the Asia Pacific. In addition to that, Flux Power is 2.03 times more volatile than Asia Pacific Wire. It trades about -0.3 of its total potential returns per unit of risk. Asia Pacific Wire is currently generating about 0.44 per unit of volatility. If you would invest 155.00 in Asia Pacific Wire on August 27, 2024 and sell it today you would earn a total of 44.00 from holding Asia Pacific Wire or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flux Power Holdings vs. Asia Pacific Wire
Performance |
| Timeline |
| Flux Power Holdings |
| Asia Pacific Wire |
Flux Power and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flux Power and Asia Pacific
The main advantage of trading using opposite Flux Power and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flux Power position performs unexpectedly, Asia Pacific 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 Pacific will offset losses from the drop in Asia Pacific's long position.| Flux Power vs. Bloom Energy Corp | Flux Power vs. Eos Energy Enterprises | Flux Power vs. Sunrise New Energy | Flux Power vs. GrafTech International |
| Asia Pacific vs. Tantalus Systems Holding | Asia Pacific vs. Hydrogen Engine Center | Asia Pacific vs. Alfen NV | Asia Pacific vs. Legrand SA ADR |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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