Correlation Between WHA Public and AJ Plast
Can any of the company-specific risk be diversified away by investing in both WHA 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 WHA 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 WHA Public and AJ Plast Public, you can compare the effects of market volatilities on WHA 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 WHA Public with a short position of AJ Plast. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Public and AJ Plast.
Diversification Opportunities for WHA Public and AJ Plast
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WHA and AJ Plast is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding WHA 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 WHA 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 WHA 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 WHA Public i.e., WHA Public and AJ Plast go up and down completely randomly.
Pair Corralation between WHA Public and AJ Plast
Assuming the 90 days trading horizon WHA Public is expected to generate 15.16 times less return on investment than AJ Plast. But when comparing it to its historical volatility, WHA Public is 26.46 times less risky than AJ Plast. It trades about 0.06 of its potential returns per unit of risk. AJ Plast Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,227 in AJ Plast Public on September 2, 2024 and sell it today you would lose (747.00) from holding AJ Plast Public or give up 60.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Public vs. AJ Plast Public
Performance |
| Timeline |
| WHA Public |
| AJ Plast Public |
WHA Public and AJ Plast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Public and AJ Plast
The main advantage of trading using opposite WHA Public and AJ Plast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA 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.The idea behind WHA Public and AJ Plast Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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