Correlation Between Asia Pacific and Sunson Textile
Can any of the company-specific risk be diversified away by investing in both Asia Pacific and Sunson Textile 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 Pacific and Sunson Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Pacific Fibers and Sunson Textile Manufacturer, you can compare the effects of market volatilities on Asia Pacific and Sunson Textile 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 Pacific with a short position of Sunson Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pacific and Sunson Textile.
Diversification Opportunities for Asia Pacific and Sunson Textile
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Sunson is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Fibers and Sunson Textile Manufacturer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunson Textile Manuf and Asia Pacific 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 Pacific Fibers are associated (or correlated) with Sunson Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunson Textile Manuf has no effect on the direction of Asia Pacific i.e., Asia Pacific and Sunson Textile go up and down completely randomly.
Pair Corralation between Asia Pacific and Sunson Textile
Assuming the 90 days trading horizon Asia Pacific Fibers is expected to generate 1.26 times more return on investment than Sunson Textile. However, Asia Pacific is 1.26 times more volatile than Sunson Textile Manufacturer. It trades about -0.05 of its potential returns per unit of risk. Sunson Textile Manufacturer is currently generating about -0.11 per unit of risk. If you would invest 5,300 in Asia Pacific Fibers on August 31, 2024 and sell it today you would lose (3,300) from holding Asia Pacific Fibers or give up 62.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Asia Pacific Fibers vs. Sunson Textile Manufacturer
Performance |
| Timeline |
| Asia Pacific Fibers |
| Sunson Textile Manuf |
Asia Pacific and Sunson Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Pacific and Sunson Textile
The main advantage of trading using opposite Asia Pacific and Sunson Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pacific position performs unexpectedly, Sunson Textile 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 Sunson Textile will offset losses from the drop in Sunson Textile's long position.| Asia Pacific vs. PT Sreeya Sewu | Asia Pacific vs. Multistrada Arah Sarana | Asia Pacific vs. Polychem Indonesia Tbk | Asia Pacific vs. Pan Brothers Tbk |
| Sunson Textile vs. Tifico Fiber Indonesia | Sunson Textile vs. Ricky Putra Globalindo | Sunson Textile vs. Supreme Cable Manufacturing | Sunson Textile vs. Voksel Electric Tbk |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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