Correlation Between Apple and Polyplex (Thailand)

Can any of the company-specific risk be diversified away by investing in both Apple and Polyplex (Thailand) 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 Apple and Polyplex (Thailand) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and Polyplex PCL, you can compare the effects of market volatilities on Apple and Polyplex (Thailand) 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 Apple with a short position of Polyplex (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Polyplex (Thailand).

Diversification Opportunities for Apple and Polyplex (Thailand)

-0.24

Correlation Coefficient

Apple  Polyplex (Thailand)

Very good diversification

The 3 months correlation between Apple and Polyplex is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Polyplex PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex (Thailand) and Apple 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 Apple Inc are associated (or correlated) with Polyplex (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex (Thailand) has no effect on the direction of Apple i.e., Apple and Polyplex (Thailand) go up and down completely randomly.

Pair Corralation between Apple and Polyplex (Thailand)

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.5 times more return on investment than Polyplex (Thailand). However, Apple Inc is 2.01 times less risky than Polyplex (Thailand). It trades about 0.03 of its potential returns per unit of risk. Polyplex PCL is currently generating about -0.19 per unit of risk. If you would invest  23,360  in Apple Inc on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Apple Inc or generate 0.43% return on investment over 90 days.

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

Apple Inc  vs.  Polyplex PCL

Apple Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Polyplex (Thailand)

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polyplex PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Apple and Polyplex (Thailand)

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

The idea behind Apple Inc and Polyplex PCL 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.