Correlation Between TDG Global and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both TDG Global 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 TDG Global and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TDG Global Investment and Asia Pacific Investment, you can compare the effects of market volatilities on TDG Global 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 TDG Global with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of TDG Global and Asia Pacific.
Diversification Opportunities for TDG Global and Asia Pacific
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TDG and Asia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding TDG Global Investment and Asia Pacific Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investment and TDG Global 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 TDG Global Investment 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 Investment has no effect on the direction of TDG Global i.e., TDG Global and Asia Pacific go up and down completely randomly.
Pair Corralation between TDG Global and Asia Pacific
Assuming the 90 days trading horizon TDG Global is expected to generate 5.09 times less return on investment than Asia Pacific. But when comparing it to its historical volatility, TDG Global Investment is 1.53 times less risky than Asia Pacific. It trades about 0.02 of its potential returns per unit of risk. Asia Pacific Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 520,000 in Asia Pacific Investment on August 27, 2024 and sell it today you would earn a total of 200,000 from holding Asia Pacific Investment or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
TDG Global Investment vs. Asia Pacific Investment
Performance |
| Timeline |
| TDG Global Investment |
| Asia Pacific Investment |
TDG Global and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TDG Global and Asia Pacific
The main advantage of trading using opposite TDG Global and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TDG Global 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.| TDG Global vs. FIT INVEST JSC | TDG Global vs. Damsan JSC | TDG Global vs. An Phat Plastic | TDG Global vs. APG Securities Joint |
| Asia Pacific vs. Picomat Plastic JSC | Asia Pacific vs. Vietnam Rubber Group | Asia Pacific vs. Danang Rubber JSC | Asia Pacific vs. Hochiminh City Metal |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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