Correlation Between AAPICO Hitech and OHTL Public
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and OHTL Public 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 AAPICO Hitech and OHTL Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAPICO Hitech Public and OHTL Public, you can compare the effects of market volatilities on AAPICO Hitech and OHTL Public 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 AAPICO Hitech with a short position of OHTL Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and OHTL Public.
Diversification Opportunities for AAPICO Hitech and OHTL Public
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AAPICO and OHTL is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and OHTL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OHTL Public and AAPICO Hitech 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 AAPICO Hitech Public are associated (or correlated) with OHTL Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OHTL Public has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and OHTL Public go up and down completely randomly.
Pair Corralation between AAPICO Hitech and OHTL Public
Assuming the 90 days horizon AAPICO Hitech Public is expected to under-perform the OHTL Public. But the stock apears to be less risky and, when comparing its historical volatility, AAPICO Hitech Public is 1.25 times less risky than OHTL Public. The stock trades about -0.17 of its potential returns per unit of risk. The OHTL Public is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 35,500 in OHTL Public on December 28, 2024 and sell it today you would lose (3,900) from holding OHTL Public or give up 10.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AAPICO Hitech Public vs. OHTL Public
Performance |
Timeline |
AAPICO Hitech Public |
OHTL Public |
AAPICO Hitech and OHTL Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AAPICO Hitech and OHTL Public
The main advantage of trading using opposite AAPICO Hitech and OHTL Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, OHTL Public 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 OHTL Public will offset losses from the drop in OHTL Public's long position.AAPICO Hitech vs. Hwa Fong Rubber | AAPICO Hitech vs. AIM Industrial Growth | AAPICO Hitech vs. Wyncoast Industrial Park | AAPICO Hitech vs. Fine Metal Technologies |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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