Correlation Between Versatile Creative and Advanced Packaging

Can any of the company-specific risk be diversified away by investing in both Versatile Creative and Advanced Packaging 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 Versatile Creative and Advanced Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Versatile Creative Bhd and Advanced Packaging Tech, you can compare the effects of market volatilities on Versatile Creative and Advanced Packaging 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 Versatile Creative with a short position of Advanced Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Versatile Creative and Advanced Packaging.

Diversification Opportunities for Versatile Creative and Advanced Packaging

-0.11

Correlation Coefficient

Versatile Creative  Advanced Packaging

Good diversification

The 3 months correlation between Versatile and Advanced is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Versatile Creative Bhd and Advanced Packaging Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Packaging Tech and Versatile Creative 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 Versatile Creative Bhd are associated (or correlated) with Advanced Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Packaging Tech has no effect on the direction of Versatile Creative i.e., Versatile Creative and Advanced Packaging go up and down completely randomly.

Pair Corralation between Versatile Creative and Advanced Packaging

Assuming the 90 days trading horizon Versatile Creative Bhd is expected to under-perform the Advanced Packaging. In addition to that, Versatile Creative is 1.2 times more volatile than Advanced Packaging Tech. It trades about -0.04 of its total potential returns per unit of risk. Advanced Packaging Tech is currently generating about -0.01 per unit of volatility. If you would invest  64.00  in Advanced Packaging Tech on November 29, 2024 and sell it today you would lose (1.00) from holding Advanced Packaging Tech or give up 1.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Versatile Creative Bhd  vs.  Advanced Packaging Tech

Versatile Creative Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Versatile Creative Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Versatile Creative is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Advanced Packaging Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Packaging Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Advanced Packaging is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Versatile Creative and Advanced Packaging

The main advantage of trading using opposite Versatile Creative and Advanced Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Versatile Creative position performs unexpectedly, Advanced Packaging 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 Advanced Packaging will offset losses from the drop in Advanced Packaging's long position.

The idea behind Versatile Creative Bhd and Advanced Packaging Tech 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.