Correlation Between Asia Metal and Peerapat Technology

Can any of the company-specific risk be diversified away by investing in both Asia Metal and Peerapat Technology 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 Asia Metal and Peerapat Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Asia Metal and Peerapat Technology

-0.28

Correlation Coefficient

Asia Metal  Peerapat Technology

Very good diversification

The 3 months correlation between Asia and Peerapat is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Public and Peerapat Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peerapat Technology and Asia Metal 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 Asia Metal Public are associated (or correlated) with Peerapat Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peerapat Technology has no effect on the direction of Asia Metal i.e., Asia Metal and Peerapat Technology go up and down completely randomly.

Pair Corralation between Asia Metal and Peerapat Technology

Assuming the 90 days trading horizon Asia Metal Public is expected to generate 0.63 times more return on investment than Peerapat Technology. However, Asia Metal Public is 1.59 times less risky than Peerapat Technology. It trades about 0.18 of its potential returns per unit of risk. Peerapat Technology Public is currently generating about -0.12 per unit of risk. If you would invest  172.00  in Asia Metal Public on December 28, 2024 and sell it today you would earn a total of  25.00  from holding Asia Metal Public or generate 14.53% return on investment over 90 days.

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

Asia Metal Public  vs.  Peerapat Technology Public

Asia Metal Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Metal Public are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Asia Metal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Peerapat Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peerapat Technology 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Asia Metal and Peerapat Technology

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

The idea behind Asia Metal Public and Peerapat Technology 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.