Correlation Between Aikchol Hospital and AJ Plast

Can any of the company-specific risk be diversified away by investing in both Aikchol Hospital 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 Aikchol Hospital and AJ Plast into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aikchol Hospital Public and AJ Plast Public, you can compare the effects of market volatilities on Aikchol Hospital 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 Aikchol Hospital with a short position of AJ Plast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aikchol Hospital and AJ Plast.

Diversification Opportunities for Aikchol Hospital and AJ Plast

0.7

Correlation Coefficient

Aikchol Hospital  AJ Plast

Poor diversification

The 3 months correlation between Aikchol and AJ Plast is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aikchol Hospital 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 Aikchol Hospital 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 Aikchol Hospital 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 Aikchol Hospital i.e., Aikchol Hospital and AJ Plast go up and down completely randomly.

Pair Corralation between Aikchol Hospital and AJ Plast

Assuming the 90 days trading horizon Aikchol Hospital Public is expected to generate 0.3 times more return on investment than AJ Plast. However, Aikchol Hospital Public is 3.32 times less risky than AJ Plast. It trades about -0.13 of its potential returns per unit of risk. AJ Plast Public is currently generating about -0.41 per unit of risk. If you would invest  1,580  in Aikchol Hospital Public on November 20, 2024 and sell it today you would lose (110.00) from holding Aikchol Hospital Public or give up 6.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aikchol Hospital Public  vs.  AJ Plast Public

Aikchol Hospital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aikchol Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

AJ Plast Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days AJ Plast Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Aikchol Hospital and AJ Plast

The main advantage of trading using opposite Aikchol Hospital and AJ Plast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aikchol Hospital 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 Aikchol Hospital 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.