Correlation Between AJ Advance and Thaicom Public

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

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

Diversification Opportunities for AJ Advance and Thaicom Public

-0.52

Correlation Coefficient

AJ Advance  Thaicom Public

Excellent diversification

The 3 months correlation between AJA and Thaicom is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AJ Advance Technology and Thaicom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaicom Public and AJ Advance 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 Advance Technology are associated (or correlated) with Thaicom Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaicom Public has no effect on the direction of AJ Advance i.e., AJ Advance and Thaicom Public go up and down completely randomly.

Pair Corralation between AJ Advance and Thaicom Public

Assuming the 90 days trading horizon AJ Advance Technology is expected to under-perform the Thaicom Public. In addition to that, AJ Advance is 4.19 times more volatile than Thaicom Public. It trades about -0.04 of its total potential returns per unit of risk. Thaicom Public is currently generating about 0.19 per unit of volatility. If you would invest  1,238  in Thaicom Public on September 15, 2024 and sell it today you would earn a total of  152.00  from holding Thaicom Public or generate 12.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AJ Advance Technology  vs.  Thaicom Public

AJ Advance Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Thaicom Public

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thaicom Public are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Thaicom Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AJ Advance and Thaicom Public

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

The idea behind AJ Advance Technology and Thaicom 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.