Correlation Between AJ Plast and Allianz Ayudhya

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

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

Diversification Opportunities for AJ Plast and Allianz Ayudhya

0.68

Correlation Coefficient

AJ Plast  Allianz Ayudhya

Poor diversification

The 3 months correlation between AJ Plast and Allianz is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and Allianz Ayudhya Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz Ayudhya Capital and AJ Plast 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 AJ Plast Public are associated (or correlated) with Allianz Ayudhya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz Ayudhya Capital has no effect on the direction of AJ Plast i.e., AJ Plast and Allianz Ayudhya go up and down completely randomly.

Pair Corralation between AJ Plast and Allianz Ayudhya

Assuming the 90 days horizon AJ Plast Public is expected to under-perform the Allianz Ayudhya. In addition to that, AJ Plast is 4.46 times more volatile than Allianz Ayudhya Capital. It trades about -0.38 of its total potential returns per unit of risk. Allianz Ayudhya Capital is currently generating about -0.02 per unit of volatility. If you would invest  3,175  in Allianz Ayudhya Capital on December 1, 2024 and sell it today you would lose (25.00) from holding Allianz Ayudhya Capital or give up 0.79% of portfolio value over 90 days.

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

AJ Plast Public  vs.  Allianz Ayudhya Capital

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Allianz Ayudhya Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianz Ayudhya Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Allianz Ayudhya is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AJ Plast and Allianz Ayudhya

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

The idea behind AJ Plast Public and Allianz Ayudhya Capital 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.