Correlation Between RS Public and AJ Plast
Can any of the company-specific risk be diversified away by investing in both RS Public 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 RS Public and AJ Plast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RS Public and AJ Plast Public, you can compare the effects of market volatilities on RS Public 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 RS Public with a short position of AJ Plast. Check out your portfolio center. Please also check ongoing floating volatility patterns of RS Public and AJ Plast.
Diversification Opportunities for RS Public and AJ Plast
Very weak diversification
The 3 months correlation between RS-R and AJ Plast is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding RS 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 RS Public 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 RS 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 RS Public i.e., RS Public and AJ Plast go up and down completely randomly.
Pair Corralation between RS Public and AJ Plast
Assuming the 90 days trading horizon RS Public is expected to generate 1.41 times more return on investment than AJ Plast. However, RS Public is 1.41 times more volatile than AJ Plast Public. It trades about 0.06 of its potential returns per unit of risk. AJ Plast Public is currently generating about 0.04 per unit of risk. If you would invest 1,601 in RS Public on September 2, 2024 and sell it today you would lose (1,031) from holding RS Public or give up 64.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RS Public vs. AJ Plast Public
Performance |
| Timeline |
| RS Public |
| AJ Plast Public |
RS Public and AJ Plast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RS Public and AJ Plast
The main advantage of trading using opposite RS Public and AJ Plast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RS Public 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.| RS Public vs. Major Cineplex Group | RS Public vs. The Erawan Group | RS Public vs. Autocorp Holding Public | RS Public vs. XSpring Capital Public |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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